Europe open: Equity markets rack up healthy gains; euro continues to slip
European stocks rose in early trade, taking their cue from upbeat sessions in the US and Asia, as investors continued to assess the implications of Friday’s terrorist attacks in Paris.
At 0900 GMT, the benchmark Stoxx Europe 600 index was up 1.7%, France’s CAC 40 was 1.8% higher and Germany’s DAX was up 1.5%.
The Dow Jones Industrial Average racked up triple-digit gains on Monday, with energy stocks pacing the advance as oil prices rallied amid concerns that air strikes in Syria might disrupt supply.
“With commodities paring gains this morning investors have turned from defensive to offensive and we are seeing equities resume their drive higher,” said Mike McCudden, head of derivatives at stockbroker Interactive Investor.
“However, while macro-economic concerns remain, particularly from the Eurozone and China and investors remain bullish on a US rate rise in December, it shouldn’t be too long before the bears come out to play.”
In currency markets, the euro was weaker against the greenback, down 0.4% at $1.0645 as investors bet the US Federal Reserve will raise interest rates next month.
Societe Generale said: “EUR/USD 1.05 is an obvious psychological target, but for now all that can be said is that the FX market has the bit between its teeth.”
On the corporate front, German internet service provider United Internet rallied after posting an increase in third quarter core profit and revenues, while London-listed engineer Smiths Group surged after its first quarter trading statement showed resilience.
German car maker Volkswagen was also on the front despite news that its market share in Europe fell in October and that the company manipulated the carbon dioxide emission levels of more petrol vehicles than previously disclosed.
EasyJet was in the red despite posting an 18% rise in full year pre-tax profit as revenue and passenger numbers grew and expressing confidence over the long-term outlook for the business. Analysts pointed out that the shares in the low-cost carrier have risen 15% over the last year.
Still to come on the economic calendar, the German ZEW survey is at 1000 GMT, along with the survey for the Eurozone.
In the US, the consumer price index is at 1330 GMT, while industrial production is at 1415 GMT and the NAHB Housing market index is at 1500 GMT.