European Close Market Briefing – 16/05/2017 – by Arjun Lakhanpal

May 16, 2017 by

In European Equity Markets stocks finished with modest gains Monday, scoring a fillip from commodity stocks as oil and metals prices rose. The Stoxx Europe 600 index ended up 0.1 percent at 395.97. The oil-and-gas, basic-materials and financial sectors fared the best, but health-care, consumer-related and telecom stocks struggled. In the oil group, producers Tullow Oil PLC and Statoil ASA  ended 3.1 percent and 2.1 percent, respectively. OMV AG leapt 7.3 percent after Barclays raised its rating on the integrated oil-and-gas company. TUI AG lost 4.8 percent after the travel services company posted a slightly wider first-half adjusted loss of $251.9 million euros ($273.9 million).

In Currency Markets the dollar fell on Monday, touching lows against a number of currencies after a weak U.S. manufacturing report compounded a bounce in commodities prices that drove the greenback lower. The euro rose to a one-week high of $1.0989 against the dollar after the data, while the dollar hit a one-week low against the Swiss franc of 0.9958 franc. With prices of iron ore also rising, Australia’s dollar hit a 12-day high of $0.7444, while the New Zealand dollar rose by as much as 1 percent to $0.6915. The dollar held firm against its yen counterpart, as greenback traded at 113.59 yen, up 0.19 percent. The dollar index fell by 0.25 percent to 98.80.

In Commodities Markets oil jumped more than 2 percent to its highest in more than three weeks on Monday, topping $52 a barrel after Saudi Arabia and Russia said that supply cuts need to last into 2018, a step toward extending an OPEC-led deal to support prices for longer than first agreed. Global benchmark Brent crude was up $1.41 at $52.25 a barrel, having touched $52.63, the highest since April 21. U.S. crude rose by $1.43 to $49.26.  Spot gold was up 0.4 percent at $1,233.69 an ounce on Monday. In other precious metals, silver was up 1.8 percent at $16.75 an ounce. Platinum was up 1.9 percent at $934.44. Palladium rose 0.9 percent to $813.48 an ounce.

In US Equity Markets  the Nasdaq Composite and the S&P 500 touched record highs in late morning trading on Monday as a rise in oil prices boosted energy stocks and investors shrugged off the impact of a global cyber attack. The Dow Jones Industrial Average was up 0.43 percent, at 20,986.07. The S&P 500 was up 0.52 percent, at 2,403.44 and the Nasdaq Composite was up 0.50 percent, at 6,151.61. All the 11 major S&P 500 sectors were higher, with the energy and materials index leading the gainers. Tesla was down 2.1 percent after Morgan Stanley downgraded its rating on the electric-car maker’s stock. Patheon NV rose 32.9 percent after Thermo Fisher Scientific said it would buy Dutch drug ingredients maker for about $5.2 billion.

In Bond Markets U.S. Treasury yields fell from session highs on Monday after a New York state manufacturing survey turned negative for the first time since October, adding to a recent string of weakening data. Benchmark 10-year notes were last down 2/32 in price to yield 2.34 percent, down from 2.35 percent before the data was released. The Consumer Price Index grew 2.2 percent on a 12-month basis through April, slower than March’s 2.4 percent gain. The Empire State manufacturing survey fell to a reading of minus 1 in April, compared with a gain of 5.2 in April.