EUROPE MARKETS: European Stocks Snap Back From 5-month Low As North Korea Fears Abate
14 August 2017 - 06:28PM
Dow Jones News
By Sara Sjolin, MarketWatch
Fiat Chrysler's shares rally after report of takeover offer
European stocks on Monday bounced back from last week's sharp
losses after senior U.S. officials over the weekend sought to play
down the risk of a nuclear conflict with North Korea.
The Stoxx Europe 600 index rallied 1.1% to close at 376.16,
winning back parts of the 2.7% loss it suffered last week.
On Friday, the pan-European benchmark dropped for a third
straight day to close at its lowest level since late February,
after a war of words between U.S. President Donald Trump and North
Korean leader Kim Jong Un sparked fears of a nuclear war.
However, on Sunday U.S. Secretary of Defense Jim Mattis and
Secretary of State Rex Tillerson wrote in The Wall Street Journal
that the Trump administration was seeking diplomatic solutions
(http://nation.foxnews.com/2017/08/13/mattis-and-tillerson-were-holding-pyongyang-account)
to achieve the "irreversible denuclearization" of North Korea.
Additionally, national security adviser H.R. McMaster and
Central Intelligence Agency Director Mike Pompeo agreed that a
conflict is avoidable and that an attack by North Korea doesn't
appear imminent.
"There is clearly a coordinated effort to ease the tensions
between the two countries and it might be the first step towards a
more stable geopolitical environment after a period of elevated
rhetoric," said Konstantinos Anthis, researcher at ADS Securities,
in a note.
"The easing of tensions -- should it not be short-lived -- is a
positive catalyst for the high-beta European currencies like the
euro and the pound. If the possibility of a conflict is reduced
then both currencies should receive fresh inflows especially after
showing impressive resilience throughout the past week, which hints
at their strong fundamental backing," he added.
The euro on Monday bought $1.1787, down from $1.1823 late Friday
in New York. The pound fetched $1.2982 compared with $1.3011 on
Friday.
Stock movers: Shares of RWE AG (RWE.XE) rose 2% after the German
utility company said profit rose in the first half of the year and
that it will pay out a special dividend.
Fiat Chrysler Automobiles NV (FCA.MI) soared 8.2% after
Automotive News reported
(http://www.autonews.com/article/20170814/OEM/170819914/chinese-automakers-covet-fca)
that a well-known Chinese car maker made at least one offer this
month to buy the Italian- and U.S.-listed company (FCA.MI) . The
bid was rejected because it wasn't high enough, according to
Automotive News.
TUI AG climbed 4.8% after Credit Suisse lifted the travel
operator to neutral from underperform, according to Dow Jones
Newswires.
Indexes: Germany's DAX 30 index jumped 1.3% to 12,165.12, after
ending last week with a 2.3% drop.
France's CAC 40 index gained 1.2% on Monday, while the U.K.'s
FTSE 100 index added 0.6% to 7,353.89
(http://www.marketwatch.com/story/ftse-100-rebounds-from-3-month-low-as-north-korea-tensions-subside-2017-08-14).
Economic data: Industrial production in the eurozone fell 0.6%
in June
(http://www.marketwatch.com/story/eurozone-factory-activity-slides-in-june-2017-08-14)
compared with May, indicating that the region's economy may be
settling down after a growth spurt in the beginning of the
year.
(END) Dow Jones Newswires
August 14, 2017 12:13 ET (16:13 GMT)
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