FRANKFURT: European shares logged a second consecutive record close on Wednesday, boosted by financials as investors were relieved by a potential end to a historic US government shutdown and weighed a series of corporate updates.
The pan-European STOXX 600 index ended up 0.7 percent at 584.23 points. France’s CAC 40 gained 1 percent, while Spain’s IBEX added 1.4 percent.
Investors globally were hopeful that the US House of Representatives could soon vote to end a government shutdown that had halted economic data that is crucial for policymakers.
Although concerns linger over the impact it could have had on the world’s largest economy, expectations are that any signs of a weakening US labour market could nudge the Federal Reserve to take a more dovish outlook on monetary policy.
Talking about US shutdown relief hopes, Nick Saunders, CEO of stock trading platform Webull UK said, “that’s the underlying reason for the positive sentiment...but beyond that, a lot of the rise (in European markets) has actually been earnings driven. We’ve seen some good reports this morning...it’s these good earnings figures that are driving the markets up.”
“In particular, we see banks doing well in Europe. The bank-heavy indices, the CAC and the IBEX, are really pushing ahead and taking the whole of the European markets with them.”
Banks were the biggest boost to the STOXX index with ABN Amro rising 2.6 percent after the Dutch lender announced upbeat quarterly earnings and that it had acquired domestic commercial lender NIBC Bank to strengthen its position in its home market.
European financial stocks have outperformed the broader market on annual price returns, helped primarily by better-than-expected earnings. Banks-heavy bourses in Spain and Italy have starkly outperformed the region’s STOXX benchmark this year.
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