European Close Market Briefing – 22/06/2017 – by Arjun Lakhanpal

June 23, 2017 by

In European Equity Markets a rise in health sector helped pull stocks out of negative territory on Thursday, pegged back by the slide in the energy sector on the back of weakened oil prices. The pan-European STOXX 600 index ended the session flat following two days of straight losses, while the blue chips were also flat. Health care was the top-gaining sector, up 2 percent and briefly touching its highest level since December 2015, with Switzerland’s Novartis in the driving seat. Novartis’ shares marched 5 percent higher following a positive study result for its canakinumab medicine, which cuts risks for heart attack survivors. Europe’s energy sector was down 0.3 percent, touching near-7-month lows.

In Currency Markets the dollar was flat against a basket of currencies on Thursday as low U.S. bond yields offset in-line data on domestic jobless claims and home prices, keeping it close to the one-month peak it reached earlier this week.  The euro was 0.1 percent lower at $1.1157, while the dollar was fractionally weaker at 111.35 yen. The yen was 0.1 percent firmer against the euro at 124.22 yen. The Norwegian crown  was last up 0.55 percent at 8.4826 crowns per dollar and up 0.6 percent at 9.4670 crowns per euro. Meanwhile, the kiwi rose 0.7 percent to $0.7267 after the Reserve Bank of New Zealand rang several upbeat notes in its outlook for growth and impact of current exchange rates.

In Commodities Markets oil rose on Thursday, a day after sliding to 10-month lows, but market sentiment remained negative due to ongoing pressure from a persistent supply glut despite OPEC-led efforts to balance the market. Brent crude futures were up 70 cents at $45.52 a barrel, after falling as low as $44.53. U.S. crude futures were up 55 cents at $43.08 a barrel. Spot gold was up 0.5 percent at $1,252.12 per ounce. It had added 0.3 percent in the previous session after briefly touching a five-week low of $1,240.75. Among other precious metals, silver gained 0.7 percent to $16.55 per ounce. Platinum touched its highest in a week during the session and was up 0.9 percent at $931.80, while palladium was marginally softer at $887.50.

In US Equity Markets stocks were higher in late morning trading on Thursday as health stocks got a boost after Republicans unveiled a bill to repeal Obamacare and the energy sector took a breather with oil prices edging up from multi-month lows. The Dow Jones Industrial Average was up 0.2 percent, at 21,453.39, the S&P 500 was up 0.18 percent, at 2,440.09. The Nasdaq Composite index was up 0.1 percent, at 6,240.26. The S&P healthcare index rose 1.08 percent to hit a record high as investors cheered the bill, which is aimed at curbing Medicaid funding and reshaping subsidies to low-income people for private insurance. United Health, Johnson and Johnson and Gilead rose between 1 percent and 3.6 percent.

In Bond Markets yields on short-dated U.S. Treasuries were stable to slightly lower on Thursday while those on long-dated issues edged higher, suggesting the flattening of the yield curve this week was stalling on profit-taking as well as a rise in oil prices. Benchmark 10-year Treasuries were last down 3/32 in price to yield 2.165 percent, from a yield of 2.155 percent late on Wednesday. U.S. two-year notes were last roughly flat in price to yield 1.352 percent. U.S. 30-year Treasuries were last down 6/32 in price to yield 2.733 percent, from a yield of 2.724 percent late on Wednesday.