EUROPE MARKETS: European Stocks Climb For Sixth Time In Eight Trading Sessions
By Steve Goldstein, MarketWatch
The path of least resistance was higher as European stocks on
Friday advanced for the sixth time in eight tries on hopes for both
monetary policy and fiscal stimulus.
The Stoxx Europe 600 gained 0.47% to 391.78, with steelmakers
including Thyssenkrupp (TKA.XE), Voestalpine (VOE.VI) and
ArcelorMittal (MT.FR) gaining ground.
The German DAX increased 0.68% to 12371.89, the French CAC 40
increased 0.23% to 5633.34 and the U.K. FTSE 100 leaped 1.05% to
The gains in the U.K. were particularly strong as the Bank of
England's Michael Saunders -- who in 2017 voted for rate hikes --
said the central bank might want to consider reducing interest
rates even if the U.K. government reaches an agreement with the
European Union over departing.
"In such a scenario - not a no-deal Brexit, but persistently
high uncertainty - it probably will be appropriate to maintain an
expansionary monetary policy stance and perhaps to loosen further,"
he said in remarks that pressured the British pound .
Strategists at RBC Capital Markets say governments may take the
mantle from central banks in attempting to spur growth.
"The spreading economic downturn and the lack of room for
monetary policy have increased calls for fiscal policy to step up.
We firmly believe that this will be a growing theme over the coming
months and quarters and will eventually have a significant impact
on markets," the strategists told clients.
Former German finance minister Wolfgang Schauble, known for
being reluctant to spend and now president of the German
parliament, this week called for a review of fiscal policy.
Strategists at Morgan Stanley meanwhile say while global
price-to-equity ratios offer little headroom, European valuations
are much closer to the cycle average, at 13.7 times earnings.
Imperial Brands (IMB.LN) continued to lose ground after
Thursday's profit warning, falling 2.4% to 1754 pence. "Imperial's
disappointing performance on its vaping portfolio raises questions
if brand proposition and level of investments are adequate to
successfully compete in the new world of Tobacco in our opinion,"
said Bank of America Merrill Lynch analysts who reiterated an
underperform and lowered its price target to 1650 pence from 1850
Osram Licht (OSR.XE) rose 3% to 39.88 euros after Ams AG
(AMS.EB) raised its takeover bid to 41 euros per share. Ams has
been vying with a consortium of Bain Capital Private Equity LP and
Advent International Corp in trying to buy the German lighting
Ams shares rose 1.5% in Swiss trade.
(END) Dow Jones Newswires
September 27, 2019 06:20 ET (10:20 GMT)
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