On 29 March, 2017 – European stocks closed higher as UK triggers Brexit process
European stocks rose for a second straight day Wednesday, as investors largely ignored the official commencement of the UK’s negotiations to break from the European Union.
United States
The tech-heavy Nasdaq closed higher for a fourth straight session Wednesday, while the Dow industrials finished lower, as stock investors digested hawkish comments from Federal Reserve speakers and a drop in US gasoline inventories bolstered the energy sector. The Nasdaq Composite Index climbed 22.41 points, or 0.4%, to finish at 5,897.55, led by a 20% surge in shares of Vertex Pharmaceuticals after the company’s drug for cystic fibrosis met endpoints in two late-stage clinical studies. Additionally, shares of Amazon.com boosted the index as they rose to a record high of $876.44 and closed up 2.1% as one analyst said that the company’s “retail dominance” was driving investor interest.
The Dow Jones Industrial Average fell 42.18 points, or 0.2%, to close at 20,659.32, for its ninth losing session in the past 10. Shares of UnitedHealth and Travelers were the largest decliners. Despite the Dow’s recent slump, the blue-chip average is only down 1.4% over that period, and remains just 2.4% below an all-time high reached March 1. Meanwhile, the S&P 500 index finished up 2.56 points, or 0.1%, at 2,361.13. Energy was the day’s largest gainer, with the sector closing up 1.2% following bigger-than-expected declines in gasoline and distillate stockpiles in the latest week, a positive sign for demand. Chesapeake Energy shares rallied 7.8%, while Hess jumped 4.9% and Marathon Oil shares rose 4.1%.
Europe
European stocks rose for a second straight day Wednesday, as investors largely ignored the official commencement of the UK’s negotiations to break from the European Union, dubbed Brexit. After swinging in and out of positive territory through the day, the Stoxx Europe 600 index closed 0.3% higher at 378.53, building on a 0.6% rally from Tuesday. UK stocks ended in positive territory Wednesday, helped by the pound’s drop, as the UK triggered Article 50 and officially kicked off its exit from the European Union. The UK’s FTSE 100 index ended 0.4% higher at 7,373.72, also after a volatile trading day. The pound traded at $1.2405 at the time of the European market close, down from $1.2450 late Tuesday in New York. UK Prime Minister Theresa May struck an upbeat tone when she addressed parliament after the letter was delivered, saying Brexit presents a “unique opportunity” to “build a stronger, fairer, better Britain.”
Germany’s DAX 30 index gained 0.4% to 12,203, while France’s CAC 40 index rose 0.5% to 5,069.04. Posting the biggest loss in the Stoxx 600, shares of Scout24 slid 8.9% after a disappointing guidance from the online marketplace. Shares of BHP Billiton climbed 2.7% after the mining giant said it’s considering a new iron-ore investment in Australia. London Stock Exchange rose 2.7% and Deutsche Börse climbed 1.7% after European Union’s antitrust watchdog blocked the planned $28 billion merger between the two.
Asia Pacific
Asian stock markets were broadly down early Thursday following a mixed session in the US overnight, though shares in Australia outperformed the rest of the region thanks to firmer oil prices. But the declines have been mild so far, as markets largely shrugged off headlines noting the official start of a two-year countdown for the UK’s divorce from the European Union. Meanwhile, better-than-expected US oil data buoyed energy-related stocks. Australia’s S&P/ASX 200 was up 0.1%, rising for the fourth straight session and getting close to the key 6,000-point level. The Nikkei Stock Average was down 0.2%, while Korea’s Kospi was off 0.3% and the Hang Seng Index in Hong Kong declined 0.4%. Strong overnight gains in oil prices faded slightly in Asia trade, but crude remained in positive territory amid signs that oil demand in the US is picking up. Official data released Wednesday show a larger-than-expected decline in gasoline and distillate stocks, while crude inventories rose 900,000 barrels, well below market expectations.
Across the region, oil and gas companies’ share prices rose. Hong Kong-listed Chinese offshore oil giant Cnooc rose 0.3%, Australia’s Woodside Petroleum was 1.3% higher and Japanese oil producer Inpex added 1.8%. In Japan, declines in financial stocks weighed, more than offsetting the gains in energy. Yield-sensitive names were also lower as Treasury yields slipped overnight. Japan Post Insurance and Mitsubishi were each off about 1%. In China, stocks furthered Wednesday’s decline due to continued liquidity worries and large declines in recently listed companies. The Shanghai Composite Index fell 0.6%, after the People’s Bank of China refrained from open-market operations for a fifth session. Meanwhile, Chinese authorities unveiled a plan to reduce the steel industry’s debt ratio to below 60% within the next three to five years, causing worries among some investors that the deleveraging in the broader financial system could jitter equity markets.
Looking Forward
US releases weekly jobless claims today followed by consumer spending and core inflation data tomorrow.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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