European Close Market Briefing – 26/10/2017 – by Arjun Lakhanpal

In European Equity Markets stocks rose from four-week lows on Thursday, boosted by the ECB’s decision to keep stimulus taps open and hopes of a breakthrough in the Catalan crisis, while third-quarter earnings triggered sharp moves in individual stocks. The pan-European STOXX 600 benchmark index rose 1.1 percent to 391.45 points with heavy gains across most sectors and trading centers, particularly in Germany where the DAX touched an all time closing high with a 1.4 percent rise. Spain’s IBEX closed up 1.9 percent as hopes of a breakthrough in the Catalan crisis fueled optimism among investors. Nokia was the biggest faller on the STOXX, losing a spectacular 17.5 percent after the Finnish firm reported weaker-than-expected quarterly earnings.

In Currency Markets the euro fell on Thursday, putting it on track for its worst day against the dollar in a month as the European Central Bank’s decision to extend its bond purchases into 2018 at a reduced rate spurred selling of the single currency. The euro was at $1.1720, down 0.8 percent from late Wednesday. The single currency was down 0.7 percent at 133.41 yen. The dollar steadied at 113.855 yen after hitting a three-month top overnight. South Africa’s rand was the day’s big mover. It fell 1 percent after Wednesday’s budget slashed growth forecasts, raised debt projections and re-ignited fears for its credit rating. The greenback was trading up 0.4 percent at 94.088 against a basket of currencies.

In Commodities Markets  oil prices were little changed after erasing earlier losses by midday on Thursday as Middle East tensions and Saudi comments about ending a global supply glut offset an unexpected increase in U.S. crude inventories and high U.S. production and exports. Brent futures were up 0.2 percent, at $58.57 a barrel, while U.S. West Texas Intermediate crude was up 0.3 percent at $52.33 per barrel.  Spot gold fell 0.1 percent to $1,275.40 an ounce. U.S. gold futures for December delivery fell 0.2 percent to $1,276.60. In other precious metals, silver rose 0.2 percent to $16.94 an ounce. Platinum rose 0.2 percent to $917.99 an ounce, while palladium climbed 0.9 percent to $969.10.

In US Equity Markets stocks were higher on Thursday, driven by gains in financial and technology stocks and ahead of earnings from marquee companies, including Google-parent Alphabet and Amazon. The Dow Jones Industrial Average was up 0.51 percent, at 23,447.32, the S&P 500 was up 0.33 percent, at 2,565.47 and the Nasdaq Composite was up 0.22 percent, at 6,578.06. Bristol-Myers Squibb fell 3.6 percent after the company said its gross margin, as a percentage of revenue, fell. AbbVie lost 1.8 percent after reporting deaths in psoriasis studies. Tech sector’s 0.65 percent rise led the gainers. Twitter jumped 15 percent after the company said it could turn its first ever profit in the fourth quarter, helped by cost cuts and new sources of revenue.

In Bond Markets U.S. Treasury yields fell on Thursday after two days of gains in choppy trading, tracking the euro zone bond market, after the European Central Bank extended its stimulus program until at least September next year but at a diminished pace.  In mid-morning trading, 10-year U.S. Treasury note yields were at 2.440 percent, slightly down from Wednesday’s 2.444 percent. U.S. 30-year bond yields were lower for most of the session, but were last little changed at 2.956 percent, from 2.955 percent the previous session.