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Stocks - European Markets Rally on U.S. Tax Reform Hopes

Published 12/18/2017, 03:43 AM
Updated 12/18/2017, 03:43 AM
© Reuters.  Frankfurt Stock Exchange

© Reuters. Frankfurt Stock Exchange

Investing.com - European markets opened sharply higher on Monday, boosted by hopes a major U.S. tax reform bill will be passed before the end of the year and as investors eyed the release of final euro zone inflation data due later in the day.

The EURO STOXX 50 rallied 1.01%, France’s CAC 40 jumped 1.27%, while Germany’s DAX 30 was up 1.09% by 03:40 a.m. ET (07:40 GMT).

Market sentiment improved after Republicans on Friday put the finishing touches on a sweeping tax overhaul bill.

They are confident Congress will now pass the tax bill this week, with a Senate vote planned as early as Tuesday.

Financial stocks were broadly higher, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) advanced 0.81% and 0.47%, while Germany's Commerzbank AG O.N. (DE:CBKG) and Deutsche Bank (DE:DBKGn) gained 0.44% and 0.79%.

Among peripheral lenders, Italy's Intesa Sanpaolo (MI:ISP) added 0.14%, while Spanish banks Banco Santander (MC:SAN) and BBVA (MC:BBVA) climbed 0.62% and 1.36% respectively.

Elsewhere, shares in Continental AG (DE:CONG) rallied 1.01% after the German company's Chief Finance Officer Wolfgang Schaefer said on Saturday that the group has at least €3 billion ready for acquisitions to expand into growing automotive markets.

On the downside, Atos SE (PA:ATOS) tumbled 1.59% after the group's bid for chipmaker Gemalto (AS:GTO) was trumped by a €4.8 billion offer made by Aerospace and defense group Thales.

In London, FTSE 100 gained 0.53%, as UK lenders tracked their European counterparts higher.

Shares in the Royal Bank of Scotland (LON:RBS) added 0.14% and Lloyds Banking (LON:LLOY) gained 0.45%, while HSBC Holdgins and Barclays (LON:BARC) advanced 0.62% and 0.84% respectively.

Shire PLC (LON:SHP), saw shares rise 0.36% after the company filed a new motion in a U.S. court that Roche says aims to stop some patients from getting its medicine. The move comes amid Roche’s patent dispute with Shire over the Swiss drugmaker’s new haemophilia drug Hemlibra.

Mining stocks were also higher on the commodity-heavy index, as Glencore (LON:GLEN) rose 0.11% and Anglo American (LON:AAL) climbed 0.74%, while Rio Tinto (LON:RIO) and BHP Billiton (LON:BLT) jumped 0.79% and 1.86% respectively.

Next PLC (LON:NXT) was one of the worst performers on the index, with shares down 1.27% as H&M's downbeat fourth quarter results released last week highlighted the struggles faced by bricks-and-mortar stores.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.47% increase, S&P 500 futures signaled a 0.28% gain, while the Nasdaq 100 futures indicated a 0.51% climb.

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