European Close Market Briefing – 19/07/2017 – by Arjun Lakhanpal

In European Equity Markets a slew of upbeat updates from European firms helped the region’s benchmark index rise on Wednesday and recoup the previous session’s sharp losses, with tech stocks enjoying their best day in 10 months and all sectors making gains. The pan-European STOXX 600 index rose 0.7 percent while blue chips climbed 0.6 percent. Dutch semiconductor equipment maker ASML, up 6 percent, boosted the tech sector. The firm beat second quarter earnings estimates thanks to strong demand from manufacturers of memory chips. Gains among banking stocks were reined in by Commerzbank which fell 3.1 percent to the bottom of the DAX after UBS cut its rating on the bank to ‘neutral’.

In Currency Markets the U.S. dollar recovered some losses against the euro on Wednesday after touching a more than one-year low in the prior session, but hit a more than three-week low against the yen as traders awaited European Central Bank and Bank of Japan meetings. The euro was last at $1.1523, near the day’s session low of $1.1511 and down about 0.2 percent. The dollar was down 0.3 percent against the yen after touching 111.56 yen, its weakest against the Japanese currency since June 27. Sterling edged lower against the dollar and it was last down 0.1 percent to $1.3028. The dollar index was last up 0.2 percent at 94.744 but not far from a more than 10-month low struck Tuesday of 94.476.

In Commodities Markets oil prices jumped more than 1 percent on Wednesday after a U.S. report showed a bigger weekly draw than forecast in crude and gasoline stocks along with a surprise decrease in distillate inventories. The EIA said U.S. crude stocks fell 4.7 million barrels during the week ended July 14. Brent futures for September delivery were up 1.2 percent, at $49.44 a barrel. U.S. West Texas Intermediate crude for August was up 1.2 percent, at $46.94 on its second to last day as the front month.  Spot gold was down 0.1 percent at $1,240.55 an ounce. Silver was flat at $16.25 an ounce, off an earlier two-week high of $16.362. Platinum was 0.2 percent higher at $923.50 an ounce, while palladium was up 0.6 percent at $868.75 an ounce.

In US Equity Markets  the Nasdaq and the S&P traded at record levels in late morning trading on Wednesday, powered by technology and healthcare stocks, while IBM capped gains on the Dow. The Dow Jones Industrial Average was up 0.09 percent, at 21,593.21, the S&P 500  was up 0.24 percent, at 2,466.70. The Nasdaq Composite was up 0.4 percent, at 6,369.81. IBM fell 3.7 percent after the company’s quarterly revenue came in below expectations. Morgan Stanley rose 3 percent after the Wall Street bank reported better-than-expected profit and bond trading revenue declines that were modest compared with arch-rival Goldman Sachs’. CSX fell 5.2 percent after the third-largest U.S. railroad operator’s forecast missed expectations.

In Bond Markets U.S. Treasury yields were little changed on Wednesday on light trading volume with benchmark yields hitting their lowest levels in nearly three weeks in advance of a meeting of European Central Bank policymakers on Thursday. Benchmark 10-year Treasury yield  was 2.264 percent, flat from Tuesday’s close after touching 2.255 percent earlier on Wednesday, which was the lowest since June 29. German 10-year yield was down 2 basis points at 0.538 percent.