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Europe close: Dip in euro boosts stocks

By Alexander Bueso

Date: Wednesday 16 Aug 2017

Europe close: Dip in euro boosts stocks

(ShareCast News) - Reports that European Central Bank chief Mario Draghi was not planning to signal a policy shift at a key conference next week weighed on the euro, in turn giving a lift to stocks across the Continent.
By the closing bell, the benchmark Stoxx 600 was higher by 0.69% or 2.59 points to 379.09, alongside an advance of 0.71% or 86.62 points in Germany's Dax to 12,263.86.

In Italy, the Milan FTSE Mibtel ended higher by 1.21% or 262.74 points at 21,984.85.

According to a sourced report from Reuters, Draghi was not planning any fresh messages for the upcoming Jackson Hole Symposium in the States.

Instead, his intention was reportedly to focus on the venue's main theme, namely fostering a dynamic global economy, preferring to hold off on any debate until autumn.

That weighed on the euro/dollar rate, which was down by 0.21% to 1.1711, although for Michael Hewson at CMC Markets UK, as long as the pair remained above 1.1620 another move towards 1.20 continued to be the most likely scenario.

During the night, Anthony H Cordesman at CSIS minimised the purported risk from North Korea's missile test, explaining that "firing an unproven missile with an unproven warhead in an unproven re-entry vehicle with unproved accuracy and reliability at these ranges against a major nuclear power goes from stupidity to insanity."

Nevertheless, recent events on the Korean peninsula did hold the potential for escalating tension in Northeast Asia over the next decade, he said.

Front month Brent crude oil futures reversed course, falling 0.16% to $50.72 per barrel despite weekly US Department of Energy data revealing a 8.99m barrel drop in the country's stockpiles.

The Stoxx 600's gauge of Basic Resource companies' shares paced gains with an advance of 2.49% to 412.18 despite a Bloomberg report that hedge fund manager Crispin Odey was 'shorting' metal stocks in anticipation of slower economic growth in China.

Meanwhile, in economic news, Eurozone gross domestic product growth picked up from a 0.5% clip in the first three months of 2017 to a 0.6% pace in the second quarter, amid strong expansions in the Netherlands and Spain.

On the corporate front, shares in Carlsberg were holding lower after the company disappointed investors by failing to raise its full-year earnings forecasts, instead reiterating it was expecting a mid-single digit increase in profits.

Maersk headed in the other direction; despite under-delivering with its second quarter results, while company chief Soren Skou sounded a cheery note on the industry's outlook.

Akzo Nobel reached a three-month litigation truce with activist hedge-fund Elliot Management.

Arcelor Mittal's South African unit was reportedly mulling layoffs in a bid to lower costs.

Fiat was in the spotlight amid reports that a Chinese suitor had presented a bid for the company this month.

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