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World markets record best start to a new year as Europe stocks hit highest in over two years

January 8, 20182K views0 comments

European shares are doing their bit, having hit their highest level since August 2015 Monday morning, after Asia rallied to near-record levels.

Traders are encouraged by this morning’s strong consumer confidence, according to theguardian’s report, and investor sentiment survey, which suggests the eurozone economy is continuing to flourish.

The pan-European Stoxx 600 was 0.23 percent higher, hitting its highest level since August of 2015. Autos led the gains, up by more than 1 percent, as investors grow confident on the prospects of the sector in 2018.

Basic resources were among the top performers in late-morning deals boosted by news of trade deals between France and China.

Airbus is trying to reach new deals with China on the A380 as the French company works to get new customers. The deal is part of a trade mission by Emmanuel Macron, President  of France, during his first state visit to China.

Looking at individual stocks, Galapagos rose to the top of European benchmark, up by about 4 percent, after news of positive preliminary tests in an osteoarthritis study. Dialog Semiconductor was up by 2 percent after its preliminary fourth-quarter sales numbers came in above expectations.

On the other hand, Micro Focus dropped 17 percent after saying its pretax profit for the first half of its fiscal year was boosted by the acquisition of Hewlett Packard Enterprises.

Meanwhile, shares of Mothercare fell 24 percent after the retailer issued a profit warning.

More broadly, positive global sentiment continues to drive European stocks. On Friday, the Dow set a new record for the best start to a year since 2006.

Chancellor Angela Merkel of Germany sounded optimistic about reaching a deal with the Social Democrats and thus avoiding fresh elections. In the U.K., Prime Minister Theresa May said over the weekend there would be a cabinet reshuffle this week.

In the corporate world, Hershey and Ferrero are racing to buy Nestle’s U.S. candy business. The latter was slightly lower ilate morningng deals.

Strong EU data
In terms of data, the Halifax measure of house prices contracted by 0.6 percent month-to-month in December, worse than the consensus. “Halifax’s data suggest that the recent jump in new mortgage rates has poured cold water on a market that already was flagging,” Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, said in an email.

He added that “the recent reforms to stamp duty (a purchase levy) for first-time buyers and further reductions in the number of existing homes coming on to the market, however, should ensure that prices stabilize, rather than fall outright, in 2018.”

Elsewhere, consumer confidence data in the euro zone hit their strongest level in more than 17 years. The increase in economic confidence was above market expectations.

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