European Close Market Briefing – 25/05/2017 – by Arjun Lakhanpal

In European Equity Markets stocks struggled to keep gains on Thursday in choppy trade as falls in commodity-facing firms weighed, with investors hunting for fresh direction in the aftermath of Europe’s blistering first quarter earnings season. The pan-European STOXX 600 index was up just 0.1 pct. Euro zone blue chips were 0.2 percent higher. French aerospace supplier Zodiac gained 0.2 percent after accepting a reduced offer from aero engine maker Safran, following a series of profit warnings. Safran’s shares rose 1.1 percent. British media group Daily Mail and General Trust decreased more than 7 percent, set for its biggest one-day loss in more than a year after its first-half results disappointed.

In Currency Markets the Canadian, Australian and New Zealand dollars all fell solidly on Thursday, tracking a decrease in oil prices as OPEC countries meeting in Vienna looked like they would go no further with production cuts than previously expected by markets. The U.S. dollar fell 0.1 percent against the index measuring its broader strength while gaining marginally to 111.75 yen and $1.1213  per euro respectively. The Norwegian crown, another oil-linked currency also fell initially, before recovering to stand 0.1 percent higher to 9.3320 crowns per euro. The Australian dollar was half a percent lower at $0.7466 after Wednesday’s fall to $0.7443 following rating agency Moody’s downgrade of China.

In Commodities Markets oil prices fell nearly 5 percent on Thursday as OPEC’s decision to extend production curbs fell short of expectations of deeper or longer cuts. As expected, the OPEC, along with other non-OPEC members, agreed to extend a cut in oil supplies of 1.8 million barrels per day (bpd) until the end of the first quarter of 2018 to reduce a glut of supply. Brent crude oil was down $2.38 a barrel at $51.58 a barrel. U.S. West Texas intermediate crude futures fell $2.43 a barrel to $48.93, a 4.8 percent decline, breaking through $50 for the first time all week as volumes rose sharply. U.S. gold futures were up 0.3 percent at $1,256. Silver rose 0.3 percent to $17.23 an ounce.

In US Equity Markets  the S&P 500 and Nasdaq Composite were in record territory in late morning trading on Thursday, buoyed by strong earnings from the embattled retailer sector. The Dow Jones Industrial Average  was up 0.39 percent, at 21,093.86. The S&P 500 was up 0.46 percent, at 2,415.61 and the Nasdaq was up 0.59 percent, at 6,199.54.  Best Buy rose as much as 17 percent to a record high of $58.99 as its comparable sales unexpectedly rose last quarter. Tommy Hilfiger-owner PV was second-biggest gainer with a 7 percent jump to a near 6-month high on strong results. Sears rose as much as 32 percent after posting its first quarterly profit in nearly two years.

In Bond Markets U.S. Treasury yields fell on Thursday ahead of a $28 billion sale of seven-year notes, the final part of $88 billion worth of coupon-bearing government supply this week. The benchmark 10-year Treasury yield was 2.254 percent, down 1 basis point from late on Wednesday. German 10-year bond yields were at 0.40 percent on Wednesday, having climbed about 20 basis points this year.