EUROPE MARKETS: European Stocks End Higher In Wake Of German Political Turmoil
By Carla Mozee and Victor Reklaitis, MarketWatch
Merkel says she would prefer a new election over a minority government
European stocks finished higher Monday, with German equities recovering following the collapse of talks to form a coalition government for the eurozone's largest economy.
What markets are doing: In Frankfurt, the DAX 30 index rose 0.5% to end at 13,058.66, turning around from a decline of 0.5%.
France's CAC 40 was up 0.4% to close at 5,340.45, and the U.K.'s FTSE 100 edged up 0.1% to end at 7,389.46.
The Stoxx Europe 600 tacked on 0.7% to finish at 386.39.
The euro bought $1.1741 after hitting an intraday low of $1.1723 and an intraday high of $1.1809. The shared currency late Friday in New York fetched $1.1793. Against the pound, the euro traded hands at GBP0.8864 versus GBP0.8923 on Friday.
What's moving markets: Stocks started in the red after talks to form a "Jamaica" governing coalition of parties in Germany broke down. On Sunday, the pro-business Free Democratic Party ended talks about forming a coalition government (http://www.marketwatch.com/story/euro-plummets-as-uncertainty-in-germany-rattles-markets-2017-11-19) with Merkel's Christian Democratic Union and the center-left Greens.
But German equities started to turn higher and the euro came off session lows against the U.S. dollar following a Monday report that the FDP said it would support a minority government. German President Frank-Walter Steinmeier urged the political parties (http://www.marketwatch.com/story/german-president-urges-parties-to-cooperate-avoid-new-election-2017-11-20-8915243) to return to the negotiating table, rather than calling new elections.
The breakdown in talks puts Merkel's fourth term as chancellor in doubt, as well as raising the prospect of a minority government and perhaps eventually a new general election if the situation can't be resolved. Merkel late Monday said she would prefer a new election (http://www.marketwatch.com/story/germanys-merkel-would-prefer-new-election-over-minority-government-2017-11-20) over a minority government.
What strategists are saying: "The DAX saw major volatility today after the coalition talks in Germany ended badly," said David Madden, a CMC Markets UK analyst, in a note.
"This casts doubt over the future of German politics, as Angela Merkel's Christian Democratic Union party may be forced to form a minority government or call another general election."
"The Germany equity market made a remarkable swing from negative to positive in the day, and the slide in the euro helped it," Madden added.
Stock movers: Altice NV (ATC.AE) shares jumped 5.2% after the French telecom said it has no plans to raise capital (http://www.marketwatch.com/story/altice-says-it-has-no-plans-to-raise-capital-2017-11-20-14855247). The company recently announced a management shake-up (http://www.marketwatch.com/story/altice-replaces-ceo-combes-in-exec-shakeup-2017-11-10)in the wake of disappointing third-quarter results and a slide in its share price.
RWE AG (RWE.XE) rose 2.8% following a Reuters report over the weekend that the German utility is considering ways to cut its stake of EUR16.8 billion ($19.8 billion) in its Innogy retail business (https://www.reuters.com/article/innogy-ma-enel/rwe-rallies-on-hopes-for-innogy-deal-less-stringent-german-climate-policy-idUSL8N1NQ1Z4). One option includes doing a deal with Italy's Enel (ENEL.MI), the report said.
NEX Group PLC (NXG.LN) fell 0.8%, but was off session lows, as the financial trading company cut its interim dividend (http://www.marketwatch.com/story/nex-group-first-half-profit-falls-cuts-dividend-2017-11-20) and said profit fell in the first half of fiscal 2018.
Mediclinic International PLC (MDC.LN) fell 3.1% after the private hospital company said it's ditching plans to make an offer (http://www.marketwatch.com/story/mediclinic-no-longer-plans-to-make-offer-for-spire-2017-11-20) to buy Spire Healthcare Group PLC (SPI.LN). Spire shares fell 8.4% on the midcap FTSE 250 index.
Roche Holding AG (ROG.EB) jumped 5.9% after the drugmaker outlined positive results (http://www.marketwatch.com/story/roche-shares-rise-on-positive-trial-results-2017-11-20) from two major late-phase trials: one for its hemophilia treatment Hemlibra and the other for Tecentriq, a cancer therapy.
(END) Dow Jones Newswires
November 20, 2017 12:15 ET (17:15 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.