Europe close: Political news fills US holiday-induced vacuum
European equity markets ended on a mixed note - albeit little changed - as political news filled the vacuum left by Wall Street as US markets remain closed in observance of Presidents Day.
Investors were also eyeing a meeting of eurozone finance ministers in Brussels later in the day as they aim to reach a deal on a second review of Greece’s stalled €86bn bailout so it does not sour upcoming elections in the Netherlands, France, Germany and possibly, Italy.
By the close of trade, the benchmark Stoxx Europe 600 index was up 0.22% to 371.04 and Germany’s DAX rose 0.60% to 11,827.62 but France’s CAC 40 edged lower by 0.05% or 2.59 points to 4,864.99.
"Greece stands again, alone, at the centre of a large chessboard. If negotiations were only about Greece, a country of 10m people and an economy the size of Milan or Düsseldorf, then these would have already been completed a long time ago.
"But it is clear to everyone that the approach to dealing with Greece entangles a much wider array of interests than solving the Greek crisis itself – and can be seen as a blueprint for future crises. Understanding the next steps can reveal insights on Europe's next steps towards, or against integration," said Alberto Gallo, head of macro strategy at Algebris.
To take note of, strategists at JP Morgan sounded a bullish note on Germany's Dax, touting the high weighting of Cyclicals in it and the strong reflationary trends in place both globally and domestically.
Meanwhile, oil prices advanced, with Brent crude up 0.55% to $56.12 per barrel and West Texas Intermediate 0.39% firmer to $53.99.
French government debt saw heightened volatility as low trading volumes contributed to sharp swings on its 10-year debt after a fresh poll at the weekend revealed Macron´s lead over rival Marie Le Pen had shortened to 58% to 42%, down from the up to 62% of backing he commanded in earlier tallies.
However, by the end of the day the yield on the benchmark 10-year bond had settled just two basis points higher at 1.06%, albeit after hitting an intra-day high of 1.14%.
In other political news, also over the weekend a poll by Emnid Institute revealed that the centre-left Social Democrats party had increased its lead over chancellor Angela Merkel's CDU party by one percentage point to 33.0%.
Euro/dollar was flat against the dollar at 1.0616.
In corporate news, Unilever plunged 5.99% as US rival Kraft Heinz ditched its plans to take over the Marmite owner, just two days after it emerged that the London-listed consumer goods firm had rejected a $143bn offer.
Michael Hewson, chief market analyst at CMC Markets, said: "There had been widespread speculation that this bid may well have turned out to be a rather protracted affair given some of the politics involved. Kraft’s quick about turn appears to have drawn a line under that, over concerns that any public battle could have the potential to turn increasingly bitter."
On the upside, Royal Bank of Scotland gained 6.81% after saying it will abandon plans to sell its Williams & Glyn business and instead provide funds to help challenger banks, if a Treasury proposal is accepted by the European Commission.
Aerospace and defence group Rolls-Royce advanced 5.05% after Goldman Sachs upgraded it to 'buy' from 'neutral', lifting the price target to 1,030p from 743p and adding the stock to its 'Conviction' list, saying the company has the potential to substantially increase free cash flow between now and 2020.
Steinhoff International rose 4.71% after the Netherlands-listed furniture maker called off talks for a $30bn merger with Shoprite, South Africa’s biggest supermarket chain.
On the data front, German producer price inflation rose to 2.4% in January, from 1% last year and more than the 2% expected. Producer prices increased 0.7% in January from 0.4% in December and ahead of the 0.3% forecast.
The annual producer price index rose at its highest rate since March 2012 when it rose 2.6%.
Consumer confidence in the single currency bloc deteriorated in February, the European Union's executive arm said.
The European Commission's consumer confidence index dropped 1.4 points from a reading of -4.8 for January to -6.2 for February.
Economists had penciled in a reading of -4.9.