LONDON: Europe’s main stock markets rose Tuesday, with the DAX climbing one percent despite continued political uncertainty in Germany, while EasyJet’s share price was propelled higher on a positive outlook.
The euro remained under pressure after German Chancellor Angela Merkel struggled to form a government following months of horse-trading with other parties failed.
The leader of 12 years indicated Monday she was ready to hold snap elections after the collapse of coalition talks at the weekend plunged Europe’s biggest economy into turmoil.
“Merkel said she did not favour a minority government because it wouldn’t bring the stability necessary to govern effectively,” said Greg McKenna, chief market strategist at AxiTrader.
“That suggests more talks but an increased chance of fresh elections in early 2018. How that plays out is going to be interesting for the euro and certainly the Brexit process as well.”
In addition to the DAX, the CAC 40 was also pushing higher, trading up 0.7 percent in afternoon trading.
The FTSE 100 in London added 0.3 percent higher.
Meanwhile EasyJet’s annual net profit slumped by almost one third on strong competition and a Brexit-fuelled slump in the pound, the British no-frills airline revealed on Tuesday.
But its share price was up 5.4 percent at 1,347 pence in afternoon deals on “signs of a break in the clouds ahead”, noted George Salmon, equity analyst at stockbroker Hargreaves Lansdown.
“Forward reservations are up on last year, and the trend for rising costs and lower prices is set to reverse in the coming months.”
Across the Atlantic, while concerns about the prospects for US tax reform continue to nag, optimism about the global economy provided some buoyancy to Wall Street, which opened higher.
The Dow climbed 0.4 percent in the first minute of trading. All three main New York indices closed higher on Monday.
However, with the Thanksgiving holiday shortening the US trading week analysts do not expect much more guidance from New York in the next few days.
Still, Tokyo’s main stocks index jumped 0.7 percent Tuesday, led by exporters.
Among other markets, Hong Kong pushed to a 10-year high, with Tencent up 2.4 percent, extending Monday’s surge that makes it the first Asian member of the exclusive club of global firms with a market capitalisation above $500 billion.
The Chinese internet giant was about $520 billion, around the same as Facebook.
On currency markets, the embattled Turkish lira struck a record low against the US dollar as investors took fright over an impending trial in the United States and changes to banking regulations.
The Turkish lira lost over one percent in value to trade at 3.97 to the dollar late morning, testing the never-before-reached 4.0 ceiling, before rallying slightly to 3.95 in the early evening.
Source: Brecorder.com
