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European stocks rise as markets focus on Germany, Italy; Dax up 0.26%

Published 11/28/2013, 03:44 AM
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Investing.com - European stocks were higher on Thursday, as markets remained focused on political developments in Germany and Italy, while trade volumes were expected to remain thin with U.S. markets closed for the Thanksgiving Day holiday.

During European morning trade, the EURO STOXX 50 added 0.26%, France’s CAC 40 edged up 0.19%, while Germany’s DAX 30 rose 0.26%.

Investors remained focused on events in Germany, after Chancellor Angela Merkel’s Conservative party reached a deal on Wednesday to form a coalition government with the Social Democrats, following weeks of negotiations.

The Italian political front was also in focus, a day after the expulsion of Italian politician and three-time former Prime Minister Silvio Berlusconi from parliament, following a vote in the Italian Senate.

Separately, speaking to journalists on Wednesday, European Central Bank Vice President Vitor Constancio downplayed speculation that the ECB was preparing new long-term loans for banks.

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale rose 0.07% and 0.36%, while Germany's Deutsche Bank gained 0.30%.

Among peripheral lenders, Spanish banks BBVA and Banco Santander climbed 0.39% and 0.41% respectively, while Italy's Unicredit and Intesa Sanpaolo advanced 0.33% and 0.71%.

Elsewhere, Repsol shared added 0.32% amid reports the Madrid-based oil company plans to start negotiating final terms of a compensation deal with Argentina to end a 19-month conflict over the seizure of its YPF unit.

In London, FTSE 100 inched up 0.03%, although gains were capped by losses in Kingfisher, down 4.73%, after the home-improvement retailer gave a gloomy outlook for the business climate in France, where a weakened consumer economy weighs on its Castorama and Brico Depot chains.

Also on the downside, catering company Compass tumbled 1.12% after Citigroup cut its rating on the stock to "neutral" from "buy"
Meanwhile, Thomas Cook saw shares soar 10.04% after the travel operator reported a 49% increase in full-year profit.

Financial stocks were also broadly higher. Shares in HSBC Holdings gained 0.31% and Barclays climbed 0.50%, while the Royal Bank of Scotland and Lloyds Banking advanced 0.88% and 1.12%.

In the mining sector, stocks were mixed as Glencore Xstrata rose 0.28% and Rio Tinto rallied 1.20%, while Vedanta Resources and Randgold Resources lost 0.23% and 0.57% respectively.

Rio Tinto earlier said it will cost USD3 billion less than previously expected to meet its goal of increasing iron ore output capacity to 360 million metric tons.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.23% rise, S&P 500 futures signaled a 0.24% gain, while the Nasdaq 100 futures indicated a 0.85% climb.

Later in the day, Germany is to release preliminary data on consumer inflation, in addition to data on the change in the number of people unemployed.


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