In European Equity Markets stocks held around one-year highs on Thursday, supported by mergers and acquisitions-related optimism, with Johnson & Johnson’s $30 billion deal to buy Actelion lifting shares in the Swiss biotech firm. The STOXX 600 added 0.2 percent. Germany’s DAX rose 0.4 percent to its highest since May 2015, while UK’S FTSE ended flat. Actelion rose 19.4 percent after the U.S. healthcare giant’s move to make an all-cash purchase that includes spinning off Actelion’s research and development pipeline. Unilever fell 4.7 percent after the consumer goods maker reported lower-than-expected fourth-quarter sales growth, blaming the Indian government’s withdrawal of high-value notes and a weak economy in Brazil.
In Currency Markets the dollar rebounded from a seven-week low on Thursday, as investor appetite improved with higher global bond yields and stable stock markets around the world, a day after the Dow Jones Industrial Average topped the 20,000 mark for the first time. The dollar index was up 0.4 percent at 100.47. The dollar gained nearly 1 percent against the yen to 114.39 yen, while the euro fell 0.5 percent versus the greenback to $1.0685. The dollar trimmed gains against both the yen and euro after a weak set of U.S. economic data, including an increase in initial jobless claims and a fall in new home sales. Sterling was down 0.4 percent at $1.2575 despite a solid reading of Britain’s fourth-quarter growth.
In Commodities Markets oil prices were driven 2 percent higher by an ongoing rally in the U.S. stock market on Thursday, although gains were capped by plentiful supplies and bulging inventories in spite of efforts by producers to cut output. U.S. light crude futures were up $1.22 to $53.97 a barrel, a gain of 2.2 percent, while Brent crude rose 2.3 percent, to $56.33. Spot gold prices were down 0.8 percent at $1,190.16 an ounce from an earlier low of $1,185.15, its lowest since Jan. 11. U.S. gold futures fell 0.7 percent to $1,189.6. Spot silver fell 0.5 percent to $16.86, platinum ceded 0.1 percent to $976.74. Palladium slid 0.4 to $726.20, after earlier touching a three-week low at $711.15.
In US Equity Markets the Dow Jones Industrial Average continued with its record run on Thursday, after breaching the 20,000 milestone a day earlier. The Dow Jones industrial average was up 0.12 percent, at 20,092.49. The S&P 500 was up 0.01 percent, at 2,298.79 and the Nasdaq Composite was up 0.19 percent, at 5,666.91. Biogen was up 3.4 percent after the drugmaker reported results. EBay jumped 7.3 percent, a day after the e-commerce company reported a rise in revenue for the fourth-quarter holiday period. Verizon Communications fell 1.5 percent after the Wall Street Journal reported the company is exploring a combination with cable company Charter Communications . Charter was up 6.6 percent.
In Bond Markets U.S. Treasury yields were little changed on Thursday with benchmark yields hovering at a four-week high in advance of a $28-billion auction of seven-year notes, part of this week’s $88 billion coupon-bearing government debt supply. The yield on benchmark 10-year Treasury notes was flat at 2.525 percent after touching 2.551 percent earlier which was its highest since Dec. 28. Germany’s 10-year bond yields, the benchmark for the euro zone, hit a one-year high of 0.48 percent and France’s equivalent hit 1 percent.
European Equity Earnings
Bankinter (BKT SM) – FY16 Net profit EUR 490mln, Net interest margin EUR 979mln, fully loaded core capital ratio 11.2% vs. 11.5 at Dec end.
Sky (SKY LN) – H1 EBITDA GBP 934mln vs. Prev. EUR 1.01bln. 12% Increase in Rev to GBP 6.4bln, EPS GBP 0.283/shr, H1 Op profit GBP 679mln vs. Prev. GBP 744mln.
Svenska Cellulosa (SCAB SS) – FY16 Adj. op profit rose 7%, Dividend increased by 4.3%, Adj EBIT SEK 13.9bln, sales SEK 116.4bln and Co. is to strengthen its UK tissue business, impairment loss of SEK 10mln will be observed.