EUROPE MARKETS: Germany's DAX Closes At Record High As U.S. Shutdown Ends
By Sara Sjolin, MarketWatch
Carrefour rallies after revealing plans for sweeping overhaul
European stock markets rose again on Tuesday, propelling the region's benchmark index to a more-than two-year closing high as traders welcomed the end of the U.S. government shutdown and a round of solid corporate earnings.
What are indexes doing?
The Stoxx Europe 600 index rose 0.2% to end at 402.81, scoring its highest close since August 2015.
Read:Why ditching stocks in this bull market is a 'dangerous' move (http://www.marketwatch.com/story/dont-ditch-the-bull-market-its-dangerous-to-be-out-of-stocks-top-uk-fund-manager-says-2018-01-16)
Germany's DAX 30 index gained 0.7% to 13,559.60 surpassing its previous record close of 13,478.86 set in November.
France's CAC 40 index slipped 0.1% to 5,535.26, while the U.K.'s FTSE 100 picked up 0.2% to 7,731.83. (http://www.marketwatch.com/story/ftse-100-finds-higher-footing-as-easyjet-rises-but-pound-lurks-near-post-brexit-high-2018-01-23)
Spain's IBEX 35 index climbed 0.2% to 10,609.50 and Greece's Athex Composite Index rallied 1.6% to 872, building on solid gains from Monday (http://www.marketwatch.com/story/european-stocks-wobble-around-2-12-year-high-as-ubs-falls-washington-wrestles-2018-01-22) in the wake of sovereign-ratings upgrades.
What is driving the market?
European stocks were boosted by news late Monday that the U.S. Congress passed a three-week funding measure (http://www.marketwatch.com/story/shutdown-averted-for-now-as-congress-passes-temporary-budget-measure-2018-01-23) that brought a halt to the three-day shutdown. The bill, also signed by President Donald Trump, keeps the U.S. government running up to Feb. 8, but has done little to resolve the underlying policy fights between the Democrats and Republicans.
That means a similar shutdown could happen when the three-week stopgap bill expires if the two parties fail to reach an agreement on government-spending levels and immigration.
The dollar rebounded after the deal came through, sending the euro to an intraday low of $1.2223. The shared rebounded, however, later in the day to trade at $1.2283, compared with $1.2262 late Monday in New York.
German stocks were also supported by data showing economic sentiment in Europe's largest economy rose more than expected in January (http://www.marketwatch.com/story/german-economic-sentiment-jumps-in-january-2018-01-23-54854959). The ZEW measure of economic expectations rose by three points to 20.4 points, beating economists' forecasts of 17.5 points.
What are strategists saying?
"It's taken a while for the DAX to join in with the all-time high hitting performances of the FTSE and the Dow Jones seen in 2018. However, with German coalition talks steadily moving along, a stopgap deal to end the U.S. government shutdown, and a subsequent pullback from the euro against the dollar, the bourse seems ready to bulge, shooting up by 130 points to tease a 13,600 record peak," said Connor Campbell, financial analyst at Spreadex, in a note.
Which stocks are in focus?
Shares of easyJet PLC (EZJ.LN) jumped 5.1% after the airline posted solid fiscal first-quarter results with total revenue up 14.4% (http://www.marketwatch.com/story/easyjet-upbeat-on-growth-as-revenue-per-seat-rises-2018-01-23). The company also said it has secured approximately 60% of expected bookings for the second quarter, slightly ahead of the past year.
In the same industry, International Consolidated Airlines Group SA (IAG.LN) (IAG.LN) added 1.5% after the British Airways parent said it lost its bid Austrian airline Niki's assets.
Logitech International SA (LOGI) rose 8%. The gain came after the Swiss electronics company posted a 22% jump in dollar-denominated revenue, the biggest increase in seven years.
Carrefour SA (CA.FR) put on 3.2% after the French retailer announced a sweeping overhaul of its business (http://www.marketwatch.com/story/carrefour-announces-revamp-voluntary-redundancies-2018-01-23), including job cuts, new partnerships and potential store closures.
Sky (SKY.LN) rose 2.3% even as the U.K. Competition and Markets Authority provisionally found the proposed acquisition of British pay-TV giant by 21st Century Fox Inc. (FOX)"not in the public interest" because of plurality concerns. (http://www.marketwatch.com/story/fox-deal-for-sky-not-in-public-interest-cma-2018-01-23)
(END) Dow Jones Newswires
January 23, 2018 12:09 ET (17:09 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.