European stocks bounce back after global rout; DAX rallies 1.2%

The pan-European Euro Stoxx 0 index was up by 0.5 percent in early deals, with technology in addition to autos seeing the strongest gains. The German DAX rose 1.2 percent which has a broad based rally across all major bourses from the region. Beaten-down luxury stocks also jumped on Friday morning with Pandora up 6 percent in addition to Kering up 3.5 percent.

Global markets had been shaken by two consecutive sessions of losses from the U.S., with Asian equities mixed Friday on the back of a 500-point drop for the Dow Jones Industrial Average at the close of Thursday’s session. Traders have got increasingly nervous about the prospect of rising interest rates in addition to a tightening Federal Reserve, alongside warnings coming from the International Monetary Fund about risks to global economic growth.

U.S. bond markets have attracted much attention, with Treasury yields hitting multi-year highs This kind of week — higher yields mean higher borrowing costs, seen as negative for corporates in addition to their stock prices. Meanwhile, President Donald Trump has continually criticized the Fed for raising rates too high too fast, on Thursday claiming the U.S. central bank had directly caused the stock market correction over the past couple of days.

Back in Europe, Italy in addition to the U.K. remain from the spotlight in terms of political news. While excessive spending concerns continue to weigh on Italy’s government, the pressure to strike a European Union withdrawal deal can be a big challenge for Britain.

On Thursday, the European Central Bank was reported to be unable to intervene from the event of an Italian crisis situation unless the country first seeks a bailout coming from the EU. In Brexit affairs, British Prime Minister Theresa May on Thursday said of which negotiations between the U.K. in addition to the EU on a so-called Irish backstop — a key alternative to a hard Irish border — were likely to continue through to November.

In corporate news, Anglo-Dutch oil major Royal Dutch Shell can be in talks to sell its stake in a Venezuelan joint venture with French firm Maurel & Prom, Reuters reported Thursday, citing three sources. Shares of the firm were slightly lower at the open Friday.

Meanwhile, some of the largest U.S. lenders, including J.P. Morgan, Wells Fargo in addition to Citi are due to report results on Friday, figures which will likely set the tone for earnings season.

On the data front, German September inflation numbers showed a 2 percent rise for the month, boosted by energy in addition to food prices.

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