EUROPE MARKETS: European Stocks Gain Ground As Euro Drifts Lower
August 30 2016 - 6:09AM
Dow Jones News
By Carla Mozee, MarketWatch
European stocks pushed higher Tuesday, with shares in exporters
rising as the euro pulled lower, as investors' hopes grew for a
U.S. interest rate hike in September.
The Stoxx Europe 600 index was up 0.6% to 345.08, gaining
traction after listless action at the open. All sectors were higher
except for the basic materials group. The index on Monday shed 0.2%
(http://www.marketwatch.com/story/european-stocks-slump-as-yellens-rate-hike-message-sinks-in-2016-08-29).
The German and French indexes were outperforming the
pan-European benchmark on Tuesday. Frankfurt's DAX 30 index was up
1% to 10,649.30, while the CAC 40 index in Paris rose 1% to
4,468.98.
Among individual stocks on those indexes, German auto maker
Volkswagen AG (VOW.XE) (VOW.XE) was up 1.6% and French car maker
Peugeot SA (UG.FR) tacked on 1.8%.
At the same time, the euro fell against the U.S. dollar, at
$1.1168 from $1.1186 late Monday. European exporters such as auto
makers tend to benefit when the euro drifts lower, as it makes
their products less expensive to buy for holders of other
currencies.
The greenback has advanced since Federal Reserve Chairwoman
Janet Yellen said last week that the case for a U.S. rate hike has
strengthened, said Nawaz Ali, currency strategist at Western Union
Business Solutions, in a note.
"However, if U.S. nonfarm payrolls data this Friday shows a
third consecutive month of robust jobs growth, then I would expect
a good portion of traders to re-think their dovish bets that the
Fed will not hike interest rates from 0.5% to 0.75% on September
21," Ali added.
On Tuesday, investors will be watching for comments from Federal
Reserve Vice Chairman Stanley Fischer when he appears on Bloomberg
TV between 6.30 and 7 a.m. Eastern Time, to see whether he
continues the hawkish tone taken by Fed Chairwoman Janet
Yellen.
The European Central Bank will make its own policy announcement
on Thursday next week. Ahead of that, "there's been more narrative"
about the prospect of the ECB extending its corporate-bond
purchasing program, said Tony Cross, market analyst at Trustnet
Direct.
"That could be driving sentiment," Cross said.
Movers: Associated British Foods PLC (ABF.LN) , which runs sugar
operations and the retailer Primark, was upgraded to outperform
from sector perform at RBC. Shares were up 2.3%.
Other indexes: Italy's FTSE MIB picked up 1.3% to 16,875.88.
Bank shares on the index were gaining, including at 2.7% rise in
UniCredit SpA (UCG.MI). Spain's IBEX 35 gained 0.6% to
8,669.40.
In London, the FTSE 100 was up 0.1% at 6,845.44.
Data: A final reading of minus 8.5 of European consumer
confidence in August from the European Commission met market
expectations.
(END) Dow Jones Newswires
August 30, 2016 05:54 ET (09:54 GMT)
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