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20 Dec 2016 17:17 GMT+0 - Closing Wrap

In European Equity Markets shares rose slightly on Tuesday, holding near their highest levels since January, helped by a busy year-end for corporate deal making and more signs that Italy is making progress on stabilizing its wobbly banking sector. Europe's STOXX 600 rose 0.2 percent with healthcare and financials providing the biggest boost to the index. Among regional benchmarks, Italy's was the best performer, up 0.4 percent. Elsewhere, Lloyds Banking Group said it would buy MBNA from Bank of America for $2.4 billion, a move that would make the British lender the second-biggest credit card provider in the country. loyds shares rose 2.2 percent and were the top gainers on the FTSE 100.

 

In Currency Markets sterling hit one-month lows against a broadly stronger dollar on Tuesday as Scotland's premier said she was willing to push for independence from the rest of the UK in order to maintain access to Europe's single market post-Brexit. The pound hit a one-month low of $1.2313 before edging up to around $1.2350. The dollar climbed to a 14-year high on Tuesday after Federal Reserve Chair Janet Yellen's comments about the labour market reinforced the notion of a faster pace of U.S. interest rate hikes next year than had been expected. Its gains were strongest against the yen, which slid around 1 percent after the Bank of Japan, shrugging off the yen's recent slump, said it would keep monetary policy loose.

 

In Commodities Markets oil prices rose on Tuesday to a one-week high on expectations of a steep draw in U.S. crude stocks that could indicate the global glut is starting to shrink. Benchmark Brent crude futures were up 91 cents, or 1.7 percent, at $55.83 a barrel at 11:30 a.m. ET. Brent hit an intraday high of $55.92. U.S. crude futures rose 52 cents at $52.64 a barrel. Both contracts rose despite a strong dollar, which hit a 14-year high. The American Petroleum Institute, an industry group, will release its figures on Tuesday, ahead of official government figures due Wednesday. Crude stocks fell more than expected last week, feeding expectations for another large drop in this week's figures.

 

In US Equity Markets the Dow and the Nasdaq hit record highs on Tuesday, with the blue-chip index just 13 points shy of the 20,000 mark, a level it has never scaled. Goldman Sachs, which was up about 1 percent, gave the biggest boost to the Dow. Eight of the 11 major S&P sectors were higher, with the telecommunications index's 0.99 percent rise leading the gainers. The financial index was also up 0.93 percent. The index has risen 18.5 percent since the election, buoyed by Trump's deregulation plans and the prospect of higher interest rates. Nvidia was up 3.9 percent at $105.59 after brokerages Goldman Sachs and Mizuho raised their price targets on the chipmaker's stock. The stock was among the big Nasdaq boosters.

 

In Bond Markets U.S. Treasury prices fell on Tuesday as risk assets including stocks were stronger, reducing demand for safe haven assets, and with no new economic due to give further indications of the strength of the U.S. economy. Bond prices had rallied on Monday as some investors covered short positions and as terrorism concerns promoted by the shooting of the Russian ambassador in Turkey and a truck attack on a Berlin Christmas market raised demand for low-risk bonds. Benchmark 10-year notes were last down 10/32 to yield 2.58 percent, up from 2.54 percent late Monday.

 

 

 

 

 

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