Sun, Mar 05, 2017 - Page 14 News List

French rally helps European markets remain consistent

BOOSTING BANKS:The growing possibility of an interest rate increase by the US Federal Reserve has helped banks, which led industry groups gains

Bloomberg

European stocks on Friday closed little changed, paring earlier losses, as banks rallied and French shares climbed after polls showed anti-eurozone candidate Marine Le Pen lagging rival Emmanuel Macron for the first time.

The STOXX Europe 600 dropped 0.1 percent to close at 375.23, after earlier sliding as much as 0.5 percent, but finished the week up 1.4 percent from its close of 370.01 on Feb. 24.

France’s CAC 40 Index climbed 0.6 percent to close at 4,995.13, its highest level since August 2015. That compared with its close of 4,845.24 on Feb. 24, a weekly increase of 4 percent.

US INTEREST RATE HIKE

Investors were also awaiting a speech by US Federal Reserve Chair Janet Yellen after European markets closed, following hawkish comments by her colleagues earlier this week that boosted bets for an interest rate hike this month.

Banks have been the biggest beneficiaries of that speculation, leading gains among industry groups and helping send the STOXX 600 to its best weekly advance this year.

“The US remains the key driver of markets right now. Such has been the turnaround in expectations, that a rate move looks more or less a done deal,” CMC Markets London-based market analyst Michael Hewson wrote in a note.

Traders are pricing in a 92 percent chance of a rate increase when the Fed announces its decision on March 15, up from 40 percent just a week ago, Fed fund futures showed.

SLUMPING STOCKS

Among shares active on corporate news, Berendsen PLC slumped 11 percent after the provider of industrial laundry services forecast operating profit for this year would be below estimates.

WPP PLC dropped 8 percent, dragging media shares to the worst performance in the STOXX 600, after it projected slower growth and weaker new business.

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