Europe ends higher but sterling gains weigh on U.K. stocks
European stocks closed higher on average Wednesday after signs of progress with U.S. tax cuts and Brexit negotiations boosted sentiment.
The pan-European STOXX 600 ended around 0.26 percent higher in trade, with most sectors in positive territory. The U.K.’s FTSE 100 closed lower by 0.9 percent, as sterling rose against the U.S. dollar. Most other bourses, with the exception of the Swiss market, ended higher.
Retail stocks led the gains on Wednesday, up 1.74 percent for the day. Ocado was one of the top performers in the sector, adding to gains of more than 20 percent in the previous session. HSBC raised its target price for the stock, sending shares of the U.K. online grocer group more than 15 percent higher.
A basket of U.K. & European Bank stocks closed the day around 1.6 percent higher. This after the Fed Chair nominee Jerome Powell suggested a December interest rate hike looked likely.
Deutsche Bank said plans to revamp its investment bank would take another two to three years. Germany’s largest lender has been seeking to steady the ship after a series of scandals and lawsuits last year. Its shares rose 2.4 percent.
In other stock news, Spain’s Aena, meanwhile, rose more than 3 percent after Santander upgraded its rating on the stock to “buy”.
Back in Europe, Britain and the European Union (EU) were reported to have reached a deal on a Brexit divorce bill on Tuesday. British newspapers said the final total would be approximately 50 billion euros ($59.2 billion). A deal over the bill would indicate London and Brussels are edging closer to a new phase in their negotiations.
Meanwhile, market focus also turned to bitcoin after it surpassed $11,000 during European trade. The digital currency, which was valued at 6 cents seven years ago, has soared more than 20 percent since Friday.
Stateside, the prospects of a tax cut appeared to improve on Tuesday as Senate Republicans moved to set up a full vote as soon as Thursday. However, several details of the measure remain unsettled and Republican leaders have admitted they are yet to round up the votes needed for passage in the Senate.
In the United States markets opened with record highs for the Dow Jones Industrial Average and the S&P 500. Earlier a revision of third-quarter U.S. GDP showed the economy expanded at an annualized rate of 3.3 percent.
Meanwhile, despite the improved economic growth in the euro zone, the European Central Bank warned Wednesday that there are concerns linked to a sudden increase in volatility.
Source: CNBC
