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European shares hit two-week high on Brexit deal hopes
Published Oct 15, 2019 04:19AM ET
By Medha Singh and Lisa Pauline Mattackal
(Reuters) - European stocks climbed to two-week highs on Tuesday, as investors cheered comments from the European Union's chief Brexit negotiator that a deal with Britain over the terms of their divorce was still possible this week.
The pan-European STOXX 600 index (STOXX) rose 0.5% in early deals with London- and Dublin-listed stocks leading gains and all but one of the 21 European industry subsectors rising.
Retail company shares (SXRP) rose 1.2% to their highest level since May, while travel and leisure (SXTP) gained 1.1% to hit a one-year high.
"We're probably getting to a point where the base case is that investors believe that the UK and the EU will reach a deal at some point, either this week or next week or before the end of the month at an emergency summit," said Stephen Gallo, European Head of FX Strategy at BMO.
"The real question, of course, is will it get through the House (of Parliament)? We're all just waiting and watching, that's what the vast majority of investors are doing this week."
A 0.3% gain in the UK focused FTSE 250 midcaps index (FTMC) was aided by a 5.8% rise in recruiter Hays Plc (L:HAYS) after it reported steady first-quarter net fees due to strong hiring in the United States and China. [L3N2701K6]
Dublin's ISEQ (ISEQ), typically sensitive to Brexit news, advanced 1.2%.
Irish network RTE reported that the United Kingdom would make new Brexit proposals on Tuesday in an attempt to break the Brexit deadlock.
The fate of UK's withdrawal agreement will be determined by the end of the week with a crucial summit between Britain and the EU set for Thursday and Friday.
A stronger pound weighed on the shares of internationally focused companies of the FTSE 100 (FTSE), with mining companies (SXPP) also hit by another poor batch of Chinese data.
Among individual movers, shares in Wirecard (DE:WDIG) slumped 15.8% after the Financial Times published documents on the company's accounting practices alleging an effort to inflate sales and profits, dealers said.
Shares of Dutch semiconductor equipment maker ASML (AS:ASML) gained 1.3% after reports that South Korea's Samsung (KS:005930) is agreeing to buy high-end lithography machines from the company.
The focus now turns to the United States where lenders JP Morgan (N:JPM), Citigroup (N:C), Goldman Sachs (N:GS) and Wells Fargo (N:WFC) kick off third quarter earnings season in earnest later in the day.
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