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European shares hit five-month high after no-deal Brexit rejected

Stock MarketsMar 14, 2019 06:39AM ET
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2/2 © Reuters. The German share price index DAX graph at the stock exchange in Frankfurt 2/2

By Julien Ponthus and Helen Reid

LONDON (Reuters) - European shares rose to a five-month high on Thursday after Britain's parliament voted to reject a disorderly Brexit.

Sentiment improved from cautious to upbeat after the open, before a vote on Thursday evening to delay leaving the European Union.

The pan-European STOXX 600 was up 0.7 percent at 0954 GMT. British blue chips rose 0.5 percent.

"We now see a 60 percent chance (up from 55 percent) that a close variant of the prime minister's current Brexit deal is eventually ratified," Goldman Sachs (NYSE:GS) analysts wrote. The probability of a no-deal Brexit was now 5 percent, they said.

Shares in Leonardo rose the most, 9.3 percent, after the Italian defense group beat its expectations.

Germany's GEA rose 8.3 percent and France's Lagardere gained after giving more details about its divestment plans.

Among other stocks, Lufthansa posted the worst performance after reporting an 11 percent decline in fourth-quarter operating profits.

RWE was flat after it forecast core earnings might fall by a fifth this year. Germany's largest electricity producer is struggling to halt a decline in profitability at its conventional power plants.

Italy's top insurer, Assicurazioni Generali (MI:GASI), rose 0.7 percent as it raised its dividend for 2018 after beating its business plan targets.

Banks rose 0.9 percent.

"The European bank index is responding positively to the turn in the European surprise index," said Russell Quelch, financials specialist sales at Redburn. "The ECB’s assertion last week of the deterioration in the growth outlook for Europe therefore looks increasingly at risk of being behind the curve."

(GRAPHIC: Macro surprises - https://tmsnrt.rs/2Fb2JT4)

European shares hit five-month high after no-deal Brexit rejected
 

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Algomarkets BERTRAND
Algomarkets Mar 14, 2019 6:36AM ET
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While our expectations for strengthening EUR / USD yesterday were correct, the pace and magnitude of the rise was a surprise, as it easily broke the 1.1320 to hit 1.1339. The daily closing in New York (1.1325) suggests that there is still room for the resistance of 1.1380 to be reached before the EUR retreats. Support is at 1.1300 but the strongest level is at 1.1275.
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