EUROPE MARKETS: European Stocks Edge Up With Fiat Gaining, But Euro Jumps On German Progress
12 Gennaio 2018 - 12:13PM
Dow Jones News
By Carla Mozee, MarketWatch
Vivendi trims outlook
European stocks edged higher Friday, with Fiat Chrysler
Automobiles NV and industrial names advancing, but gains were held
in check by a surging euro on the back of a breakthrough in German
government-coalition talks.
How markets are moving
The Stoxx Europe 600 index rose 0.1% to 397.64. On Thursday, the
benchmark fell 0.3%
(http://www.marketwatch.com/story/european-stocks-head-for-2nd-day-of-losses-with-retail-shares-in-the-red-2018-01-11),
a second straight loss.
The index is poised for just a fractional gain for the week,
following last week's rise of 2.1%.
Germany's DAX 30 index was up 0.1% at 13,215.12, and France's
CAC 40 picked up 0.1% at 5,493.95.
The U.K.'s FTSE 100 index edged up 0.1% to 7,772.85, on track
for another record closing high. Spain's IBEX 35 rose 0.3% to
10,467.70.
Read:These 5 charts are all 'flashing green' for more U.K. stock
records
(http://www.marketwatch.com/story/these-5-charts-are-all-flashing-green-for-more-uk-stock-records-2018-01-08)
The euro charged up to $1.2123 from $1.2034 late Thursday in New
York.
The yield for the 10-year German government bund fell 2 basis
points to 0.51%, according to Tradeweb. Yields fall when prices
rise.
What's driving markets
Trading got under way with news that German Chancellor Angela
Merkel's conservative CDU party has reached an initial deal with
Martin Schulz's center-left SPD for formal coalition negotiations.
Germany in September held elections in which incumbent Merkel won,
but she had since been unable to secure a coalition to rule.
The coalition news sent the euro surging above $1.21 against the
dollar for the first time since January 2015. But a stronger euro
can weigh on shares of European exporters as it can make their
products more expensive for holders of other currencies to
purchase.
The shared currency has risen roughly 0.8% against the greenback
this week. It leapt through $1.20 on Thursday after minutes from
the ECB's December meeting
(http://www.marketwatch.com/story/euro-spikes-higher-as-ecb-minutes-suggest-possible-hawkish-shift-toward-monetary-policy-2018-01-11)
suggested it may take on a hawkish tone on its stimulus efforts as
the eurozone economy has continued to expand.
Investors this week have been starting to see more trading
updates as the earnings season begins to pick up pace. Also on deck
Friday will be U.S. inflation data, which would drive the
euro-dollar pair further.
What strategists are saying
"Merkel is one of the biggest proponents of the eurozone
project, and her ability to remain in power will be key to ensuring
stability as we go forward. While a deal is not across the line,
the sands seem to be shifting in favor of a positive, stable
resolution which is expected to remove a significant degree of
uncertainty for euro traders," said IG Market Analyst Joshua Mahony
in a note.
Stock movers:
GKN (GKN.LN) shares rallied 26% as the engineering group said
it's rejected an offer approach from Melrose Industries PLC
(http://www.marketwatch.com/story/gkn-rejects-offer-approach-from-melrose-industries-2018-01-12-34853836)(MRO.LN).
GKN also said it plans to separate its aerospace and automotive
businesses, as it named Anne Stevens as chief executive
officer.
Fiat Chrysler shares (FCA.MI) in Milan rose 2.8% after the
company said late Thursday it plans to invest $1 billion to shift
production
(http://www.marketwatch.com/story/fiat-chrysler-to-move-some-production-to-michigan-2018-01-11)
of its profitable Ram Heavy Duty trucks to Michigan from Mexico.
The move could help the Italian-U.S. auto maker lower risks related
to potential changes to the North American Free Trade
Agreement.
Vivendi SA shares (VIV.FR) fell 1.1%, with the French media
group saying it foresees 2017 growth of 20% to 25%
(http://www.marketwatch.com/story/vivendi-confirms-it-expects-20-25-earnings-growth-2018-01-12)
in earnings before interest, taxes and amortization. It also said
revenues should increase by close to 5%. Vivendi had previously
projected revenues to increase by more than 5% and core earnings to
rise by around 25%.
German auto maker Volkswagen AG (VOW.XE) (VOW.XE) picked up
0.7%. The company's rating at Macquarie was raised to outperform
from neutral, according to Dow Jones Newswires.
(END) Dow Jones Newswires
January 12, 2018 05:58 ET (10:58 GMT)
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