European stocks recover as German political tensions ease
FILE PHOTO: Pedestrians leave and enter the London Stock Exchange. (REUTERS/Neil Hall)
LONDON: European stock markets recovered on Tuesday (Jul 3) as political worries eased in Germany, but shares in Swiss miner Glencore saw a meltdown on news of a US legal probe over its global activities.The US bellwether crude oil contract WTI fell thanks to Saudi Arabia's announcement that it would boost production to rebalance the market but only after, earlier in the session, the WTI oil price had surged above US$75 for the first time in more than three years amid supply issues surrounding Iran and Libya.
Europe's benchmark indices were up by between half a per cent and one per cent at the close, while US stocks showed more modest gains approaching midday on Wall Street."European markets are in rebound mode ... as an apparent resolution to the German political impasse has helped dispel much of the trade war anxiety that was evident throughout Asia," noted Joshua Mahony, market analyst at IG trading group.German Chancellor Angela Merkel has survived a bruising challenge to her authority with a compromise deal on immigration.'MERKEL IS SAFE'
In high-stakes crisis talks overnight, Merkel had put to rest a dangerous row with her hardline Interior Minister Horst Seehofer that had threatened the survival of her fragile coalition government."News that Merkel is safe and the fragile German coalition will live to see another day has encouraged traders back into the Dax, which had been suffering at the hands of investor anxiety about new snap elections," said London Capital Group analyst Jasper Lawler.London slightly underperformed as gains in the top UK index were stemmed by a plunge in the value of Glencore, which was down a hefty 7.8 per cent at 321.90 pence in late trading, having earlier fallen as far as 303 after saying it was being probed by US authorities over its activities in Nigeria, Venezuela and DR Congo.Earlier, Asian stock markets ended mixed, with investors awaiting US-China tariff announcements in the latest trade war developments.
The yuan extended losses and has fallen around eight percent since the end of March to an 11-month low, as China struggles to cap a debt mountain while supporting growth.Analysts dismissed some claims that authorities are allowing the Chinese currency to weaken to offset the impact of any tariffs."We have already seen the impact on Chinese investors' anxiety over a weaker currency and subsequent capital outflow in 2015-16," said Tai Hui, JP Morgan Asset Management chief market strategist for Asia-Pacific."This is not a can of worms that Beijing wants to open again."
Key figures around 1540 GMT:London - FTSE 100: UP 0.6 per cent at 7,593.29 points (close)Frankfurt - DAX 30: UP 0.9 per cent at 12,349.14 (close)Paris - CAC 40: UP 0.8 per cent at 5,316.77 (close)EURO STOXX 50: UP 1.0 per cent at 3,406.34New York - Dow: UP 0.1 per cent at 24,341.49Tokyo - Nikkei 225: DOWN 0.1 per cent at 21,785.54 (close)Hong Kong - Hang Seng: DOWN 1.4 per cent at 28,545.57 (close)Shanghai - Composite: UP 0.4 per cent at 2,786.89 (close)Euro/dollar: UP at US$1.1657 from US$1.1642 at 2100 GMTPound/dollar: UP at US$1.3185 from US$1.3143Dollar/yen: DOWN at 110.57 yen from 110.86 yenOil - Brent Crude: DOWN 54 cents at US$76.76 per barrelOil - West Texas Intermediate: DOWN US$1.06 at US$72.89 per barrel
Source : http://www.channelnewsasia.com/news/business/european-stocks-recover-as-german-political-tensions-ease-10496472