By Geoffrey Smith
Investing.com -- European stocks are flying Tuesday morning after U.K. Prime Minister Theresa May claimed a major breakthrough in talks over Brexit with EU Commission President Jean-Claude Juncker late Monday.
They’re also getting a big tailwind from a change in sentiment regarding U.S. tech stocks, and a fresh shot of optimism about an end to the U.S.-China trade war, after reports overnight about a telephone call between U.S. Trade Representative Robert Lighthizer and his Chinese counterpart Liu He.
At 04:00 AM ET (0900 GMT), the benchmark Euro Stoxx 600 was up 3.58 points, or 1.0% at 374.16.
The big outlier among European markets is, of course, the U.K., where the FTSE 100 is down 0.3% because of the sharp rise in sterling on the Brexit news. That hits the big resource companies such as Royal Dutch Shell (LON:RDSa). But the more U.K.-focused stocks, such as house-builders Persimmon (LON:PSN), Taylor Wimpey (LON:TW), Barratt Developments (LON:BDEV) and Berkeley Group (LON:BKGH), are all outperforming. The mid-cap FTSE 250 index, which has less international exposure than the blue-chip index, is up 0.4%.
It’s still not clear whether the progress announced by May last night will be enough to get her withdrawal agreement through parliament in a key vote scheduled for later Tuesday. The deal was voted down by a margin of 230 in January and those who opposed still haven’t said whether they will back the tweaked version.
In non-Brexit news, payments company Adyen (AS:ADYEN), the most successful European IPO of last year, is down over 5% after early shareholders placed sold an 8.5% stake, worth some 1.5 billion euros, through an accelerated bookbuild. And Germany’s Commerzbank (DE:CBKG) has surged another 7.0% after Finance Minister Olaf Scholz (whose government owns some 15% of the bank) confirmed informal discussions about a merger with Deutsche Bank (DE:DBKGn). In contrast to yesterday, Deutsche is no longer rising on the news, partly due to a New York Times report saying that the New York attorney general's office subpoenaed it late Monday in relation to its dealings with U.S. President Donald Trump.