European Close Market Briefing – 30/08/2017 – by Arjun Lakhanpal

August 31, 2017 by

In European Equity Markets stocks rose on Wednesday, boosting indexes higher in a rally a day after geopolitical concern caused a decline across equity markets. The pan-European STOXX 600 gained 0.7 percent, recovering nearly all the ground lost the day before when North Korea’s missile launch sparked a sell-off. Euro zone stocks and blue chips rose 0.6 percent. Banking stocks rose 0.4 percent. Mining companies gained 1.7 percent, leading sectoral gainers in the region. Shares in German broadcaster RTL rose 2.1 percent after it boosted second-quarter revenue, beating expectations despite an advertising market it called challenging. Shares in French medical equipment supplier Biomerieux rose 8 percent after it raised its 2017 forecasts, bolstered by a strong first half.

In Currency Markets the U.S. dollar rose broadly on Wednesday on speculation the European Central Bank could step in to weaken the euro and after strong U.S. economic data boosted expectations for a solid U.S. jobs report Friday. The dollar touched a two-week high against the yen of 110.43 yen after the U.S. data, rising further off a 4-1/2-month low of 108.25 struck Tuesday following North Korea’s launch of a ballistic missile over Japan. The euro was down 0.55 percent to $1.1906, having pulled away from Tuesday’s highs of 1.2069, the strongest level since Jan. 2 2015. The dollar index was last up 0.6 percent at 92.799 after temporarily hitting a more than 2-1/2-year low of 91.621 Tuesday.

In Commodities Markets gasoline futures rose on Wednesday to another two-year high and crude oil fell, as flooding and damage from Tropical Storm Harvey shut nearly a quarter of U.S. refinery capacity, curbing demand for crude while raising the risk of fuel shortages. U.S. gasoline futures were up 6.5 percent at $1.8993 a gallon, having hit $1.9140, highest since July 2015. Brent oil was down 48 cents at $51.52 a barrel and U.S. crude fell 39 cents to $46.05. Crude inventories fell by 5.4 million barrels in the latest week, far more than the decrease of 1.9 million barrels analysts had expected. Spot gold fell 0.1 percent to $1,308.93 per ounce and silver rose 0.4 percent to $17.42 per ounce.

In US Equity Markets stocks were higher in late morning trading on Wednesday after data showed stronger-than-expected U.S. economic growth, but gains were limited by concerns about escalating tensions between Washington and Pyongyang. The Dow Jones Industrial Average was up 0.01 percent, at 21,868.05, the S&P 500  was up 0.19 percent, at 2,450.97. The Nasdaq Composite was up 0.49 percent, at 6,332.77, boosted by Gilead Sciences and Amazon. Four of the 11 major S&P sectors were lower, with the energy index’s 0.31 percent the biggest drag. Financials were among the leading gainers, with Goldman Sachs gaining 1.23 percent as the robust data is expected to strengthen the Federal Reserve’s case for another rate hike this year.

In Bond Markets U.S. Treasury yields rose on Wednesday after data indicated solid economic momentum, keeping the prospect of a December interest rate increase alive. Benchmark 10-year notes were last down 4/32 in price to yield 2.15 percent, up from 2.14 percent on Monday. Gross domestic product increased at a 3.0 percent annual rate in the April-June period, the strongest since the first quarter of 2015.