Europe midday: Stocks continue to advance as government bonds bounce back
European stocks were flat and government bond yields lower in quiet trade after Thursday’s session saw investors react to rate announcements from the Federal Reserve and the Bank of England.
The benchmark Stoxx Europe 600 index gained 0.20% to 359.52 and both Germany’s DAX and France's Cac 40 were up 0.44%.
In parallel, the yield on the benchmark 10-year Bund was lower by five basis points at 0.32% while euro/dollar was gaining 0.29% to stand at 1.0450.
Meanwhile, oil prices nudged higher, with Brent crude up 0.35% to $54.21, helped along by Goldman's decision to revise its 2017 price forecast up to $57.0 a barrel from $54.0 beforehand.
However, the resulting supply response and the likelihood that low-cost non-OPEC producers would ramp up production volumes meant the price was now seen lower in 2018, at $58.0 per barrel instead of $63.0,
Markus Huber, a trader at City of London Markets, said: “European shares are trading little changed this morning managing to hold on to their gains from yesterday on the back of mixed markets overnight in Asia. Stocks are continuing to get a boost from a weaker Euro and the notion that the US, the world largest economy will experience an uptick in growth once president elect Trump has started implementing his new policies.
“Whilst the economic and corporate calendar looks typically sparse for this time of the year main focus will be on triple witching today where stock index futures, stock index options and stock options expire. In light of the recent impressive run-up in share prices triple witching might just lead to a bit of profit taking later today however overall sentiment remains positive for now.”
In corporate news, Swiss biotech group Actelion rallied following a report that France’s Sanofi is in advanced talks to acquire the company, in a deal that could be announced as early as next week.
Rentokil Initial surged after the FTSE 250 pest control company said it has agreed to merge its Workwear and Hygiene divisions with Germany's Haniel & Cie Holding Co.
On the downside, Micro Focus International slumped after UBS cut its rating on the stock to ‘neutral’ from ‘buy’ citing near-term risks.
Consumer prices in the euro area dipped by 0.1% month-on-month in November, with the annual rate of price gains accelerating from 0.5% to 0.6%, Eurostat said.
Core prices fell 0.2% over the month, but were up 0.8% on the year, unchanged from October.
The single currency area's trade surplus slipped from €24.4bn in September to €19.7bn for October, Eurostat said in a separate release.