European Stocks Mixed in Cautious Trading

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European stocks were mixed in cautious trade on Wednesday amid a rare credit downgrade for China and the rising security condition in United Kingdom, wherein Prime Minister Theresa May raised the level of terrorist threat to “critical” last night and warned that a new attack is possibly imminent, keeping investors in a caution mood as markets were still recovering from the Manchester bombing.

The region-wide Stoxx Europe 600 index held onto a modest 0.14% gain to 392.59 while the Euro Stoxx 50 fell 0.19% to 3590.50. But regional benchmarks, including France’s CAC 40 and Germany’s DAX 30 performance index both edged down modestly, 0.11% to 5,342.35 and 0.2% to 12,633.25 respectively.

Financial stocks were mixed as well,  as BNP Paribas surged 0.66% to 66.62, and Societe Generale added up 0.54% to 50.27, while Commerzbank slipped 0.16% to 9.605, as well as Deutsche Bank at 0.82% to 16.980.

Among peripheral lenders, Italy’s Intesa Sanpaolo dropped 0.82% to 2.670. Unicredit, however, edged back up 0.18% to 16.9000. Spanish banks BBVA slipped 0.28% to 7.458, while Banco Santander surged 0.24% to 5.851.

Elsewhere, Daimler AG NA O.N. saw decline in shares 2.5% to 65.510 after German prosecutors said they would look for 11 offices and sites of the company as part of an investigation into possible diesel emissions fraud.

On the downside, Nokia slipped back 1.53% to 5.785 after jumping 1.01% following its agreement with Apple in regards to a number of the Finnish company’s patents, with many pertaining to healthcare and fitness products.

 

In London, FTSE 100 went up 0.35% to 7,511.75, weighed by Kingfisher, whose shares plummeted 6.68% after the company reported a first-quarter decline in sales due to a slowdown in its French market.

Babcock International Group PLC rallied back, as shares were barely up 0.05% to 968.00, as the infrastructure company reported a 9.7% climb in pre-tax profit to £362.1 million for the financial year ended March 31.

Marks and Spencer Group PLC was also on the positive side, with shares going up 2% to 394.60, even after the retailer announced a 64% decline in annual profit.

Mining stocks were mostly lower on the commodity-heavy index. Shares in Glencore retreated 1.35% and Randgold resources tumbled 0.76% to 7190.00, while Fresnillo and Rio Tinto plummeted 0.63% and 0.89% respectively.

In the financial sector, stocks were broadly higher as HSBC Holdings edged up 0.43% to 669.80 and Lloyds Banking rose 1.23% to 73.05, while the Royal Bank of Scotland climbed 1.74% to 269.30, as well as Barclays with shares went back up 0.61% to 215.59.

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Pound Sags After Deadly Manchester Explosion

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Sterling slipped on Tuesday after a suspected suicide attack killed at least 22 people and wounded 59 at a pop concert in the English city of Manchester.

Sterling eased 0.1 percent to $1.298, extending Monday’s 0.3 percent loss. The pound dropped 0.3 percent to 144.34 yen, after losing 0.2 percent on Monday.

The attack came up just two-and-a-half weeks before an election that Prime Minister Theresa May is expected to win easily, though polls showing that the contest was tightening put the sterling under pressure.

At least 22 people were murdered in a suicide bombing at a pop concert by U.S. singer Ariana Grande along with children in the northern English city of Manchester. Fifty-nine (59) others were injured in the attack carried out by a suicide bomber, who died after detonating an improvised explosive device.

If the attack on the concert is confirmed as a terrorist attack, this would be the worst and deadliest attack in Britain by militants since four British Muslims killed 52 people in suicide bombings on London’s transport system in July 2005.

“This has been the most horrific incident we have had to face in Greater Manchester and one that we all hoped we would never see.” said Hopkins. “We have been treating this as a terrorist incident and we believe, at this stage, the attack last night was conducted by one man. The priority is to establish whether he was acting alone or as part of a network.”

Euro At Six-Month High

The euro hit a six-month high overnight after German Chancellor Angela Merkel said it was “too weak” due to the ECB’s monetary policy, pointing out that this helped explain Germany’s relatively high trade surplus.

The common currency jumped 0.1 percent to $1.1249 after jumping as much as 0.5 percent and closing 0.3 percent higher on Monday.

Junichi Ishikawa, a senior FX strategist in Tokyo, said that Merkel’s comments boosted the euro and so the weakened dollar is not essentially a bad thing for Trump.

The chancellor’s comments delivered fresh momentum to the euro, which has been on a bullish footing since the French presidential elections earlier this month. Upbeat euro zone data and a widening spread between the 10-year German and U.S. government bond yields have also supported the currency.

Moreover, The safe-haven yen advanced against major peers like the dollar and euro but its gains were modest.

The dollar was barely down 0.09 percent at 111.14 yen after a dip to 110.860 but the euro rallied 0.03 percent to 125.12 yen.

The dollar index, which tracks the greenback against a basket of trade-weighted peers, was 0.1 percent lower at 96.80.

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