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European stocks rally, shrug off U.S. rate hike talk; Dax jumps 1.13%

Stock MarketsMay 20, 2016 03:33AM ET
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© Reuters. European stocks open sharply higher despite Fed minutes

Investing.com - European stocks opened sharply higher on Friday, as investors chose to ignore the possibility of a June rate hike in the U.S. and as a rebound in oil prices lent support to the energy sector.

During European morning trade, the EURO STOXX 50 advanced 1.29%, France’s CAC 40 surged 1.45%, while Germany’s DAX 30 jumped 1.13%.

The Fed’s April meeting minutes on Wednesday showed that officials said a June rate hike would be appropriate if economic data indicated that growth was picking up in the second quarter and employment and inflation were firming.

In addition, New York Federal Reserve President William Dudley said on Thursday that the U.S. economy could be strong enough to warrant a rate hike in June or July.

A rise in oil prices drove energy-related stocks broadly higher, as French oil and gas major Total SA (PA:TOTF) rallied 1.69% and Italy’s ENI (MI:ENI) jumped 1.74%, while Norwegian rival Statoil ASA (OL:STL) gained 1.73%.

Financial stocks were also on the upside, as French lenders Societe Generale (PA:SOGN) and BNP Paribas (PA:BNPP) advanced 1.62% and 1.64%, while Germany’s Deutsche Bank (DE:DBKGn) climbed 1.39%.

Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) surged 1.66% and 4.37% respectively, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) jumped 1.02% and 1.74%.

Elsewhere, the airline sector recovered somewhat from Thursday’s losses, as the search for the missing EgyptAir flight MS804, that is presumed to have crashed into the Mediterranean en route from Paris to Cairo, continued.

Shares in Aeroports De Paris SA (PA:ADP) rose 0.23%, while Air France KLM SA (PA:AIRF) edged up 0.20%.

In London, commodity-heavy FTSE 100 rallied 1.46%, boosted by gains in the mining sector.

Shares in Antofagasta (LON:ANTO) advanced 2.20% and Rio Tinto (LON:RIO) jumped 2.71%, while Anglo American (LON:AAL) and Glencore (LON:GLEN) surged 3.30% and 3.49% respectively.

Financial stocks added to gains, as HSBC Holdings (LON:HSBA) climbed 0.97% and Lloyds Banking (LON:LLOY) rallied 1.30%, while Barclays (LON:BARC) and the Royal Bank of Scotland (LON:RBS) soared 1.79% and 1.72% respectively.

On the downside, Merlin Entertainments PLC (LON:MERL) slipped 0.10% after the theme park operator warned of difficult trading conditions on Thursday.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.37% gain, S&P 500 futures a 0.31% rise, while the Nasdaq 100 futures indicated a 0.39% increase.

European stocks rally, shrug off U.S. rate hike talk; Dax jumps 1.13%

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