In Stock News 15/06/2016
A rally in miners and retailers lifted European stocks after a five-day rout, while traders speculated that the Federal Reserve’s latest policy review will offer encouragement to beleaguered markets.
Glencore Plc climbed 4.6 percent, helping commodity producers post the biggest increase of the 19 industry groups on the Stoxx Europe 600 Index, as metals advanced. Inditex SA pushed retailers ahead with a 4 percent rise after the maker of Zara clothingreported better-than-expected first-quarter profit. Banks in peripheral nations led gains on a gauge of lenders.
The Stoxx 600 added 1.3 percent to 324.74 at 1:19 p.m. in London, rebounding from its lowest level in almost four months. The Fed is expected to keep borrowing costs unchanged today, although Chair Janet Yellen’s comments at a press briefing after the announcement will be scrutinized for clues on the likely timing of the next increase. Futures signal the chances of a move by July have tumbled to about 16 percent from 53 percent at the start of this month, damped by weak U.S. payrolls data and turbulence in global financial markets.
“We might have a rebound today but there’s just too much uncertainty,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private-banking unit in Hellerup, Denmark. “Janet Yellen has been the fairy godmother of the bull market on a number of occasions. I’m looking for her to repeat that performance. My hunch is that she’ll try to spin a fairly constructive message.”
After climbing 16 percent from a February low to an April 20 high, the Stoxx 600 has struggled to maintain momentum amid lackluster earnings, skepticism over the European Central Bank’s stimulus program and worries over global growth. The benchmark yesterday capped its worst five-day plunge since February as Britain’s largest-selling newspaper backed a so-called Brexit and five polls put the U.K.’s “Leave” campaign ahead of “Remain,” before the June 23 referendum on European Union membership.
“We know next to nothing about what Brexit will mean,” said Knuthsen. “That leads us to consider a lot of pretty terrifying scenarios. Those fears have finally spread beyond currencies and put a lot of pressure on all asset classes lately. That’s been particularly evident with the selloff in European stocks.”
Among other shares moving on corporate news today, Zodiac Aerospace jumped 10 percent after reporting better-than-estimated third-quarter sales. Luxottica Group SpA gained 1.9 percent after Credit Suisse Group AG recommended buying the stock, citing excessive declines from its peak, attractive growth prospects and its competitiveness.
Aveva Group Plc tumbled 13 percent after talks for Schneider Electric SE to buy a majority stake in the British software maker ended without a deal. Schneider gained 2.6 percent.
Source: Bloomberg
