EUROPE MARKETS: European Stocks Hit Nearly 4-month High, Buoyed By Energy Firms And Ocado
17 Maggio 2018 - 6:55PM
Dow Jones News
By Sara Sjolin and Carla Mozee, MarketWatch
Ocado rallies after deal to enter U.S. market
European stocks on Thursday ended at their highest since late
January, as energy stocks tracked oil prices higher and Ocado
shares surged after a new partnership agreement to enter the U.S.
market.
How did markets move?
The Stoxx Europe 600 index rose 0.7% to 395.79, its highest
close since Jan. 30, according to FactSet data. The pan-European
index has been grinding higher in recent days, but in volatile
trade where it has swung between small gains and losses.
The U.K.'s FTSE 100 index leapt by 0.7% to a record close of
7,787.97
(http://www.marketwatch.com/story/uk-stocks-at-4-month-high-as-government-opens-up-for-customs-union-after-brexit-2018-05-17),
as traders welcomed reports that Britain plans to stay in Europe's
customs union after Brexit.
Germany's DAX 30 index added 0.9% to end at 13,114.61, and
France's CAC 40 index jumped 1% to 5,621.92.
Italy's FTSE MIB Index turned higher to close up by 0.3% at
23,801.99. Italian stocks and bonds had tumbled on Wednesday
(http://www.marketwatch.com/story/italian-markets-spooked-as-radical-agenda-from-5-star-league-fuels-fears-of-new-crisis-2018-05-16)after
a leaked draft of their political agenda sparked fears Italy could
end up leaving the eurozone.
Read:Italian bonds show euro 'exit' fears still rumble below the
surface
(http://www.marketwatch.com/story/italian-bonds-show-euro-exit-fears-still-rumble-below-the-surface-2018-05-16)
10-year Italian yields rose less than 1 basis points to 2.10%,
according to Tradeweb. Yields rise when prices fall.
The euro fell to $1.1799 from $1.1807 late Wednesday in New
York.
What drove market action?
Energy companies helped lift the European benchmarks as oil
prices continued to rally
(http://www.marketwatch.com/story/brent-oil-prices-surge-to-80-with-market-rattled-by-iran-supply-worries-2018-05-17)
following the Trump administration's decision to leave the Iran
nuclear deal. Brent hit $80 a barrel, while West Texas Intermediate
crude traded closer to $72 a barrel.
The Stoxx Europe 600 Oil & Gas Index advanced 1.5%.
Those moves helped guide the broader equity market from a muted
tone toward stronger gains. Investors continued to monitor
political developments in Italy and the U.K. as well as a flurry of
corporate news.
In Italy, the 5 Star Movement and the League parties reportedly
prepared a new draft of their coalition program, which is likely to
be submitted to Italian President Sergio Mattarella later on
Thursday. The new program reportedly included no references to the
possibility about Italy leaving the euro, but did point to the need
for a revision of EU treaties.
Meanwhile, in the U.K., the pound rose to an intraday high of
$1.3569 following a report that the U.K. government plans to tell
Brussels it wants to stay in the European Union's customs union
beyond 2021 in an effort to avoid a hard border with Ireland. Such
a scenario would create a so-called soft Brexit, which hard-line
Brexiteers have argued against.
The report, in the Daily Telegraph
(https://www.telegraph.co.uk/politics/2018/05/16/britain-will-tell-eu-prepared-stay-tied-customs-union-beyond/),
said Prime Minister Theresa May's Brexit subcommittee has agreed on
Britain staying in the customs union on a temporary basis, if the
technology needed to keep the borders working after Brexit isn't up
and running.
What are strategists saying?
"The euro is coming under pressure on the back of Italian
political uncertainty and the implications an anti-establishment
government by the 5 Star Movement and League parties will have for
the euro area. The story will be closely watched as it is expected
to be the major driver in euro pairs, at least in the short term,"
said Andreas Georgiou, investment analyst at XM, in a note.
Which stocks were in focus?
Shares of Ocado Group PLC (OCDO.LN) soared 44%. The company,
which runs online delivery services and makes related software,
said it has signed a partnership agreement with U.S. supermarket
chain Kroger Co
(http://www.marketwatch.com/story/ocado-entering-us-market-through-technology-deal-with-kroger-2018-05-17).(KR)
under which Kroger will use Ocado's technology in the U.S. for
grocery and other food-distribution activities.
Altice NV (ATC.AE) jumped 12% after the telecoms giant said
subscribers rose in the fist quarter at the strongest "trends
Altice has ever reported."
Shares of A.P. Moeller-Maersk A/S (MAERSK-B.KO) slumped 8.9%
after the Danish shipping major reported earnings below
expectations.
(END) Dow Jones Newswires
May 17, 2018 12:40 ET (16:40 GMT)
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