Market: Overall positive close in Europe with results from companies

by Claude Chendjou

PARIS (Reuters) – The main European stock markets, apart from Frankfurt, ended higher on Wednesday and Wall Street was also tipped in the green mid-session as investors continued to digest the generally solid results posted by companies for the second quarter.

In Paris, the CAC 40, driven by luxury in particular, ended with a gain of 0.11% to 7,326.94 points. UK Footsie rose 1.80 per cent. The German Dax, punished among other things by industrial shares, fell by 0.1 per cent.

The EuroStoxx 50 index fell 0.17 per cent. The FTSEurofirst 300 rose by 0.17% and the Stoxx 600 by 0.26%, marking the second consecutive session of gains for this index.

At the close in Europe, the Dow Jones was up 0.52%, heading for an eighth straight session in the green. The Standard & Poor’s 500 takes 0.41% and the Nasdaq 0.4%.

The positive trend on Wall Street is still driven by banks, which have generally benefited from the rapid rise in credit costs. The sector index of the S&P 500 rose 1.74% following the quarterly publications of Bank of America (+2.76%), Morgan Stanley (+1.26%), JPMorgan Chase (+0.73%) and Wells Fargo (+1.58%).

Goldman Sachs is up 1.58% despite a drop in second-quarter profit, while regional banks Citizens Financial (+5.49%) and M&T Bank (+3.29%) are coveted above-expectations results.

“We have a lot of big banks that have gone public and the results have been pretty good so far. (Goldman) is probably the first counterexample,” notes Dennis Dick, market analyst at Triple D Trading.

The new technology division also supports the trend as Tesla (+1.28%), Netflix (+0.46%) and IBM (+0.11%) are due to publish their financial accounts after the close.

VMware, up 5.46%, benefits from preliminary green light from London for merger deal with Broadcom (+0.007%).


In Paris, Kering (+7.36%), which completed a reshuffle at the helm of Gucci, pulled the CAC 40 with the appointment of Jean-François Palus as interim CEO.

Renault (+0.98%) also carried the Paris index after reporting an increase in sales volume during the first six months of the year.

Elsewhere in Europe, ASML stock, volatile, ended down 1.85% despite an increase in the group’s forecasts.

From a sector perspective, basic resources (-1.09%) saw one of the biggest declines on the Stoxx 600 due to the lowering of the Antofagasta copper production forecast (-1.36%).


Eurozone inflation was confirmed by Eurostat to ease to 5.5% year-on-year in June, while in the UK it fell more than expected last month to the lowest level in more than a year at 7.9%.


The dollar rose sharply on Wednesday (+0.39%) from a 15-month low against a basket of benchmark currencies after inflation figures in Europe.

The euro trades at 1.1193 (-0.29%) and the pound sterling at 1.2899 dollars (-1.04%).


Eurozone bond yields ended higher after their latest sharp decline, with the 10-year German Bund rising nearly five basis points to 2.405% amid caution.

“Investors are likely to wait for macroeconomic events next week, especially the ECB meeting, before increasing their exposure,” said Francesco Di Bella, rates strategist at Unicredit.

The yield on US Treasuries with the same maturity is stable at 3.7854%.


Oil prices are underpinned by China’s commitment to implement policies to “restore and expand” domestic consumption, which could increase demand for oil. U.S. crude oil inventories also fell last week, according to figures released Wednesday by the U.S. Energy Information Agency (EIA).

Brent rose 0.79% to $80.26 a barrel and US crude oil (West Texas Intermediate, WTI) rose 0.53% to $76.15.


(Writing by Claude Chendjou, Editing by Kate Entringer)

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