European Close Market Briefing – 31/08/2017 – by Arjun Lakhanpal

In European Equity Markets stocks rose for a second day on Thursday following heavy losses on jitters over North Korea but posted a third straight month of decline, while a profit warning from Carrefour sank the retail sector. The pan-European STOXX 600 ended up 0.8 percent, boosted by strong gains for miners and construction stocks, while the retail sector fell 1.3 percent. Carrefour shares fell 13 percent, their biggest daily decline in 20 years, after the French supermarket chain warned 2017 profit could decline by 12 percent and cut its sales growth target. Chipmakers AMS and Dialog Semiconductor rose 5.1 and 4.3 percent respectively as the suppliers to smartphone maker Apple benefited from increased investor enthusiasm ahead of the next iPhone release, a trader said.

In Currency Markets the euro fell against the dollar on Thursday after sources told Reuters that a growing number of European Central Bank policymakers were concerned by the strength of the euro and may go slower tightening monetary policy as a result. The euro was last down just 0.1 percent at $1.1866, but was still set to gain 0.3 percent in August and notch its sixth straight monthly rise. The New Zealand dollar sank to a roughly three-month low against the greenback of $0.7132 after a poll showed New Zealand’s Labour Party will pose a significant threat to the ruling National party at September’s election. The dollar was last roughly flat against the yen at 110.21 yen, erasing most of its gains after touching a 15-day high of 110.66 earlier in the session.

In Commodities Markets oil prices rose 1 percent on Thursday, clawing back some of the losses made a day earlier, but U.S. crude is on track for the steepest monthly losses in more than a year on demand concerns after floods knocked out a quarter of U.S. refining capacity. U.S. West Texas Intermediate crude futures were trading 1.4 percent up at $46.58 a barrel. International benchmark Brent crude was up 1.1 percent, at $51.44 a barrel. U.S. commercial crude stocks fell by 5.39 million barrels last week to 457.77 million barrels, the U.S. Energy Information Administration said on Wednesday.  Spot gold was up 0.2 percent at $1,311.77 an ounce and silver rose 0.2 percent to $17.41 an ounce.

In US Equity Markets stocks were higher in late morning trading on Wednesday as upbeat data pointed to strength in the economy. The Dow Jones Industrial Average was up 0.14 percent, at 21,922.76, the S&P 500 was up 0.35 percent, at 2,466.39. The Nasdaq Composite was up 0.53 percent, at 6,402.37. UnitedHealth’s 0.7 percent gain provided the biggest boost to the Dow. The Nasdaq biotech index rose 1.4 percent, helped by a rise in Gilead, Celgene and Biogen. Among stocks, Dollar General fell 8 percent after reporting a slide in second-quarter margins. Campbell Soup was down 5.9 percent after the company warned that sales for fiscal 2018 could fall.

In Bond Markets U.S. Treasury prices gained slightly on Thursday after consumer spending data showed continuing low inflation, and as tensions with North Korea kept up demand for the safe haven bonds. Benchmark 10-year notes were last up 2/32 in price to yield 2.138 percent, down from 2.145 percent on Wednesday. Germany’s 10-year bond yield was up just 1 basis point at 0.37 percent early on Thursday, edging away from two-month lows hit earlier this week at 0.32 percent.