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Nov. 24, 2017, 12:29 p.m. EST

DAX breaks 2-day losing run as German business, political prospects brighten

Euro extends its rise; Italian banks shine

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By Carla Mozee, MarketWatch

The euro stepped to two-month high vs. the greenback on Friday

German stocks snapped a two-session skid Friday, getting a lift as business optimism in the region’s largest economy climbed to a record and as one of Germany’s major political parties cracked the door to possibly breaking a political impasse.

How key equity gauges traded: The export-heavy — and euro-sensitive — German DAX 30 benchmark /zigman2/quotes/210597999/delayed DX:DAX +1.31% picked up 0.4% to end at 13,059.84, breaking a two-day run of losses. It closed the week up by 0.5%, snapping two weeks of declines. On the index, chemicals maker BASF /zigman2/quotes/204280060/delayed DE:BAS +0.04%  topped gainers with a 2.9% rise and car maker Volkswagen AG /zigman2/quotes/204309985/delayed DE:VOW3 -1.36%  moved up 1%.

In Paris, the CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.75% claimed a 0.2% rise at 5,390.46. In Madrid, the IBEX 35 /zigman2/quotes/210597995/delayed XX:IBEX +0.26%  picked up 0.2% to end at 10,053.50. Those indexes on a weekly basis rose 1.3% and 0.4%, respectively.

But the U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -0.09% slipped 0.1% to end at 7,409.64. That helped keep some pressure on the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.85% , which ended down less than 1 point at 386.63.

Health-care and oil-and-gas stocks led the declining sectors on the pan-European index. But tech, financial and basic-material shares closed up.

For the week, the Stoxx 600 rose 0.7% and that’s the first weekly rise in three.

The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.3694%  broke above $1.1900 for the first time since late September, rising to $1.1945 from $1.1850 late Thursday in New York. The shared currency added roughly 1.2% this week as European markets wound down for the week.

A stronger euro can be a headwind to shares of European exporters, as holders of other currencies may find it more expensive to buy goods from European companies.

What’s driving markets: Businesses in Germany have been upbeat about their prospects this month and for the months ahead. German think tank Ifo said Friday its business-climate index rose to a record high of 117.5 points, surpassing expectations.

“Germany is on track for an economic boom,” said Ifo president Clemens Fuest in the report.

The euro extended gains following the Ifo report. That added to its rise on Thursday after an upbeat reading on eurozone services and manufacturing activity and a finding of higher growth in German gross domestic product.

The bulk of responses to Ifo survey came before the collapse of talks to create a coalition to form a German government on Sunday. But on Friday, Germany’s Social Democrats reportedly dropped their hard refusal to set up another Grand Coalition to govern alongside Chancellor Angela Merkel’s Christian Democrats, raising anticipation that the country’s political crisis may be resolved.

Meanwhile, Italian banks charged higher following reports that new rules proposed in the European parliament could help lenders more easily dump their portfolio of bad loans.

Trading volumes were likely thin on Friday as U.S. markets were on a shortened schedule following Thursday’s Thanksgiving Day holiday.

What strategists are saying: “The news that Angela Merkel and her CDU-CSU party are set to meet with their former Social Democrat coalition partners acted as a pick-me-up for the euro,” said Connor Campbell, financial analyst at Spreadex, in a note.

DX : Xetra Indices
+182.49 +1.31%
Volume: 37,384
March 8, 2021 2:12p
DE : Germany: Frankfurt
+0.03 +0.04%
Volume: 6,932
March 8, 2021 2:08p
P/E Ratio
Dividend Yield
Market Cap
Rev. per Employee
DE : Germany: Frankfurt
-2.64 -1.36%
Volume: 10,565
March 8, 2021 2:01p
P/E Ratio
Dividend Yield
Market Cap
Rev. per Employee
FR : France: Euronext Paris
+43.18 +0.75%
Volume: 34,609
March 8, 2021 2:12p
XX : Spain: Madrid
+21.50 +0.26%
Volume: 120.17M
March 8, 2021 2:11p
-6.05 -0.09%
Volume: 379,008
March 8, 2021 1:12p
+3.48 +0.85%
Volume: 0.00
March 8, 2021 2:12p
US : Tullett Prebon
-0.0044 -0.3694%
Volume: 0.0000
March 8, 2021 8:25a
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