Europe close: Stocks jump, led by surge in banks, Santander
European stocks tracked gains on Wall Street with Santander leading the way following the release of its latest full-year figures.
The benchmark Stoxx Europe 600 rose 1.29%, Germany’s DAX was up 1.82% and France’s CAC 40 was 0.99% higher, as the Stoxx 600´s gauge of European lenders soared 3.05% to 179.21.
Meanwhile, crude oil prices were little changed, with both Brent and West Texas Intermediate crude futures edging higher by just 0.04%
"It may seem counterintuitive but however polarising Donald Trump is, and is likely to continue to be, financial markets take a rather more cold hearted view as basic resource and infrastructure plays push higher on the back of yesterday’s executive order with respect to the Keystone oil pipeline and his tweet yesterday that he will look at starting to implement his policy on building a wall on the Mexican border.
"This expectation of an infrastructure boom has seen bond yields start to push back up again, on higher inflation expectations, which in turn is also acting as an additional tailwind for financials as a rise in yields and widening spread differentials improve future profitability prospects," said Michael Hewson, chief Market anlayst at CMC Markets.
On the data front, German business confidence unexpectedly deteriorated in January, according to a widely-followed survey.
The Ifo Institute’s business climate index fell to 109.8 from 111.0 in December, missing expectations for a reading of 111.3.
Meanwhile, the current assessment index rose to 116.9 in January from 116.7 the month before, while the expectations index dropped to 103.2 from 105.5.
Holger Schmieding at Berenberg said: "While we should hesitate to read too much into somewhat volatile monthly data, the January correction in expectations could suggest that some German companies are starting to worry about the risks of rising protectionism.”
On the corporate side, Spanish lender Santander soared as it’s reported a 4% rise in full-year profits when compared to 2016 due to higher fees and stronger than expected lending income.
Chilean copper giant Antofagasta rallied after reporting a strong fourth quarter performance, with copper production of 205,500 tonnes, up 13.8% versus the previous quarter, lifting production for the full year to just under 710,000 tonnes, 12.5% higher than the prior year.
Mining giant BHP Billiton buckled after it posted its operational review for the half year to 31 December, despite record production achieved at Western Australia Iron Ore, and total iron ore production of 118 Mt - a 4% rise year-on-year.
Fresnillo slumped even after achieving record production of gold and silver in 2016, even though the miner experienced some delays in implementing its turnaround plan, as precious metals´ prices slipped.
Elsewhere, Novartis gained ground on news it may spin off its ailing eye-care business Alcon due to a slower-than-expected turnaround in the business.