Europe midday: Stocks advance as FBI clears Clinton

European stocks rallied on Monday as investors breathed a sigh of relief after the FBI cleared Democratic candidate Hillary Clinton of any wrongdoing over the weekend and following some well-received corporate releases.

At midday, the benchmark Stoxx Europe 600 index was up 1.3%, Germany's DAX was 1.7% firmer and France’s CAC 40 was up 1.8%.

Meanwhile, oil prices pushed higher, with West Texas Intermediate up 1.7% to $44.81 a barrel and Brent crude up 1.3% to $46.19.

The FBI said over the weekend that a fresh inquiry into Clinton’s communications found nothing to change the conclusion it had come to over the summer and that there had been no evidence of criminal wrongdoing after she used a private email server for government work.

IG’s Joshua Mahony said: “If last week saw the likes of the indices and dollar decimated as a result of another FBI email investigation, it comes as no surprise that today’s announcement has seen a substantial amount of last week’s losses reversed. The big question is whether this announcement will have a material effect upon the outcome of the US election, which is clearly perceived to be the case according to today’s market reaction.

“Markets are likely to remain on tenterhooks until we see the result of the US election, with all other economic events and announcements disregarded until the cloud hanging over the financial markets dissipates. With last week’s central bank meetings and data releases out the way, we are now seeing investors positioning themselves ahead of a hurricane of volatility which is about to hit land. The polls have Clinton in the lead, which is likely to intensify after this mornings’ FBI announcement. With the IG binary now showing an 83.5% chance of a Clinton victory (up from Friday’s 74%), it is clear that traders expect this announcement to have a substantial impact upon the election result.”

In corporate news, HSBC gained ground as it said profits in the third quarter fell 86% compared to last year due to a disposal of its Brazilian bank, but underlying profits were higher in all four of its businesses.

Dutch postal group PostNL jumped higher after rebuffing a sweetened takeover offer from Belgian rival Bpost.

Ryanair flew higher after the budget airline reported a rise in first-half profit as revenue and customer numbers grew despite difficult market conditions, and upped its long-term traffic forecast.

Informa was in the black after the business intelligence group said it was on track to meet full-year expectations.

Hammerson edged up after it exchanged contracts for the disposal of Westmorland Retail Park in Northumberland to Arch Commercial Enterprise for £36m.

Hiscox advanced after reporting a 14.3% increase in gross written premiums for the first nine months of the year.

Inmarsat rallied after Barclays upgraded its stance on the satellite company to ‘equalweight’ from ‘underweight’.

On the data front, eurozone retail sales declined less-than-expected in September compared to the previous month, but year-on-year sales were lower than economists had expected.

The seasonally-adjusted volume of retail trade among the 19 eurozone countries dropped 0.2% month-on-month, the same as the revised fall from August but better than the 0.3% fall estimated by economists.

Compared to September last year, retail sales rose 1.1%, according to estimates from Eurostat, the statistical office of the European Union, which was worse than the revised 1.2% increase seen a month ago and short of the consensus estimate of 1.3%.

Eurostat said the 0.2% month-on-month decrease was mainly due to falls for non-food products and for automotive fuel, while food, drinks and tobacco segment rose by 0.6%.

Earlier, figures from Destatis showed German manufacturing orders fell 0.6% on the month in September, versus expectations of a 0.2% increase. On the year, orders were up 2.6%.