Europe close: Stocks find a bid on trade talk hopes
Banco Bilbao Vizcaya Argentaria
€10.42
18:15 18/04/24
Most equity indices across the Continent raced higher at the end of the session, after one of Italy's deputy prime ministers, Luigi Di Maio, denied his country was looking for help from the European Central Bank in order to stem selling in the country's government debt markets.
DJ EURO STOXX 50
4,936.57
23:58 18/04/24
IBEX 35
10,699.30
18:45 18/04/24
IBEX TOP DIVIDENDO
3,023.70
18:45 18/04/24
News of a possible 'breakthrough' in talks between Brussels and London also appeared to boost sentiment, even as Canada's foreign minister Chrystia Freeland sounded an optimistic note on trade negotiations with the US.
Capturing the mood, writing in the Financial Times on the trade deal reached between Mexico and the US on Tuesday, John Authers explained how "the news [of a deal between Mexico and the US] supports those who think that President Donald Trump is 'crazy like a fox', aggressively staking out an extreme opening offer and then settling at something reasonable. I should at least bolster the hopes that a major trade conflict with China can be avoided."
Against that backdrop, by the end of trading the benchmark Stoxx 600 was standing 0.29% or 1.12 points higher at 386.58, alongside a 0.27% or 34.26 point advance for the German Dax to 12,561.68 and - above all - a 0.68% or 140.02 point gain for the FTSE Mibtel to 20,760.07.
In parallel, euro/dollar was up by 0.05% at 1.16987 but down by 1.02% to 0.89928 versus Sterling, after EU trade negotiator Michel Barnier indicated the block wanted to keep close ties with Britain, even beyond the economic sphere.
Investors were nevertheless keeping a wary eye on politics around the Continent.
Weighing on the euro throughout most of the session, according to a report in daily La Stampa earlier on Wednesday, officials in Italy may be hanging their hopes on help from the European Central Bank in the form of government bond purchases. Investors were also waiting on the result of a key review of the country's sovereign credit rating, scheduled for the following Friday.
Yet the yield on the 10-year benchmark Italian government note finished down by six basis points to 3.13% - just above its lowest level of the day - after Di Maio reportedly poured cold water on that report.
In the background meanwhile, EU Budget Commissioner, Guenther Oettinger, told Die Welt that Italy would face a penalty if it withheld its contribution over a row on migrants, ANSA reported.
For the most part, emerging markets found a reprieve, but not Turkey's lira, after ratings agency Moody's downgraded 20 financial institutions.
The US dollar gained 2.93% against the lira to 6.4594 even after the Turkish central bank tightened liquidity by ending unrestricted overnight funding for the country's lenders.
Over in Spain, the country's caretaker government opened the door to raising taxes for upper income individuals as it sought far-left Podemos's support for next year's budget law, but according to local reports was shying away from giving into demands for a special levy on banks.
Madrid's Ibex 35 was one of the top European benchmarks which finished in the red, losing 0.39% or 37.0 points to trade at 9,569.50.
Readings on German consumer confidence for September and consumption by French households in July meanwhile were more or less as expected by economists, but economists were cautious.
Consultancy Gfk's German confidence gauge slipped by 0.1 points for September, printing at 10.5 (consensus: 10.6).
Meanwhile, INSEE reported that consumption in France was up by just 0.1% month-on-month in July (consensus: 0.3%), although the miss was offset by upwards revisions to the prior month's reading.
Even so, Claus Vistesen at Pantheon Macroeconomics told clients: "Private consumption in France slowed significantly in the first half of the year, and these data don’t fill us with optimism of a rebound in Q3, though the August and September numbers could well change that picture."
Inditex was among the worst performers on the Continent, on the heels of a one notch downgrade out of Morgan Stanley on the retailers' shares to 'underweight'.
"Inditex is still a world class retailer, but its investment proposition has been weakening for some years. And we don't think that is properly reflected (yet) either in consensus estimates or the multiple the market is applying to them," the broker's analysts said.
Shares of BBVA on the other hand found a bid as Moody's reaffirmed its rating on the lender's long-term debt.