Europe midday: Report on ECB's Draghi boosts stocks

Alexander Bueso WebFG News | 16 Aug, 2017 12:57 - Updated: 13:37 | | |


Reports that European Central Bank chief Mario Draghi was not planning to signal a policy shift at a key conference next week weighed on the euro, in turn giving a lift to stocks across the Continent.

As of 1203 BST, the benchmark Stoxx 600 was higher by 0.79% or 2.96 points to 379.45, alongside an advance of 0.79% or 96.53 points in Germany's Dax to 12,274.31.

In Italy, the Milan FTSE Mibtel was ahead by 1.12% or 243.37 points at 21,965.05.

According to a sourced report from Reuters, Draghi was not planning any fresh messages for the upcoming Jackson Hole Symposium in the States.

Instead, his intention was reportedly to focus on the venue's main theme, namely fostering a dynamic global economy, preferring to hold off on any debate until autumn.

That weighed on the euro/dollar rate,which was down by 0.28% to 1.1702, although for Michael Hewson at CMC Markets UK, as long as the pair remained above 1.1620 another move towards 1.20 continued to be the most likely scenario.

During the night Anthony H Cordesman at CSIS minimised the purported risk from North Korea's missile test, explaining that "firing an unproven missile with an unproven warhead in an unproven re-entry vehicle with unproved accuracy and reliability at these ranges against a major nuclear power goes from stupidity to insanity."

Nevertheless, recent events on the Korean peninsula did hold the potential for escalating tension in Northeast Asia over the next decade, he said.

Front month Brent crude oil futures were also gaining altitude, rising 0.86% to $51.24 per barrel after the American Petroleum Institute reportedly revealed a 9.16m barrel stockdraw for last week.

The Stoxx 600's gauge of Basic Resource companies' shares was among the best performers with an advance of 1.77% to 412.18 despite a Bloomberg report that hedge fund manager Crispin Odey was 'shorting' metal stocks in anticipation of slower economic growth in China.

On the economic front, Eurozone gross domestic product growth picked up from a 0.5% clip in the first three months of 2017 to a 0.6% pace in the second quarter, amid strong expansions in the Netherlands and Spain.

Later in the day, the US Commerce Department is expected to release July data on housing starts and permits, followed by the minutes of the most recent Federal Reserve policy meeting at 1900 BST.

On the corporate front, shares in Carlsberg were holding lower after the company disappointed investors by failing to raise its full-year earnings forecasts, instead reiterating it was expecting a mid-single digit increase in profits.

Maersk was headed in the other direction; despite under-delivering with its second quarter results, while company chief Soren Skou sounded a cheery note on the industry's outlook.

Akzo Nobel reached a three-deal truce with activist hedge-fund Elliot Management.

Arcelor Mittal's South African unit was reportedly mulling layoffs in a bid to lower costs.

Fiat was in the spotlight amid reports that a Chinese suitor had presented a bid for the company this month.

More news

18:36 Numis sticks to 'hold' on Entertainment One after strong first half performance

Analysts at Numis Securities said "robust progress" evident in Canadian entertainment company Entertainment One's first-half trading results led it to the reiteration of its 'hold' rating and target price.

18:28 Europe close: Shares end near session highs

Stocks finished near their best levels of the day, possibly influenced by the latest German poll results which might help coax the country's politicians to return to the negotiating table in order to help thrash out a stable government coalition - or face the voters again.

18:08 Faroe Petroleum issues $100m senior, unsecured bond in Nordic bond market

The independent oil and gas company, Faroe Petroleum, announced on Tuesday the issue of a $100m senior, unsecured bond in the Nordic bond market, in an attempt to strengthen the company's balance sheet.

17:56 FX round-up: UK trade budget widens as greenback trades on the backfoot

Data out for the UK on Tuesday showed an unexpectedly wider budget deficit, while in the US, the dollar weakened 0.17% to 93.923 against a basket of currencies.

18:02 London close: FTSE higher on the day as UK deficit widens unexpectedly

Shares closed higher on Tuesday as data revealed an unexpected widening of the UK deficit ahead of the Autumn Budget.

17:38 Improved Asia-Pacific trading puts Spirax-Sarco in line with full-year targets

Industrial engineer Spirax-Sarco stayed on track to hit full-year expectations as sales in the four months leading to 31 October were boosted by growth in Asia Pacific, though offered limited visibility for 2018 due to the usual short-term nature of its order book.

17:27 US open: S&P 500 and Nasdaq Composite at fresh record highs

The S&P 500 and tech-laden Nasdaq Composite are pushing to fresh record highs amid a 'bullish' call on stocks out of Goldman and against a backdrop of supportive economic data.

17:04 JPMorgan upgrades ITV as European broadcaster concerns 'overstated'

UK broadcaster ITV was boosted by an upgrade from investment bank JPMorgan Cazenove, which views the European sector as markedly undervalued by the market, with addressable-TV a development that "will transform TV" for advertisers.

16:52 Investec cuts water company price target due to nationalisation threat

United Utilities could be forced to slash its dividend from 2020 due to new regulation, warned Investec, leading it to downgrade its rating on the water company, and cut target prices across the sector.

17:48 Robert Mugabe resigns as president of Zimbabwe

President Mugabe has handed in a written letter of resignation, putting a halt to impeachment hearings, the speaker of Zimbabwe's parliament said on Tuesday.