By Sara Sjolin, MarketWatch
European stocks finished slightly higher on Wednesday, with U.K. stocks leading the charge north to end at an all-time high as commodity companies rallied.
What are markets doing: On the first trading day after the Christmas holidays, the Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -3.67% rose 0.1% to close at 390.54.
Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -4.15% ended marginally lower at 13,070.02, while France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -4.75% rose 0.1% to 5,368.84.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.9635% rose to $1.1896 from $1.1859 late Tuesday in New York.
“A thin volume trading is a general theme across the markets,” said Naeem Aslam, chief market analyst at Think Markets, in a note.
“Most traders are away on their holiday and we do not expect much action in the markets, however, the general portfolio rebalancing trade would be the most common feature between now and the end of this year,” he added.
Stock movers: Mining firms helped lift markets, tracking positive moves for most metals prices. Copper advanced for a 15th straight sessions, up 0.2%.
Among miners, shares of Fresnillo PLC /zigman2/quotes/201300065/delayed UK:FRES -0.55% rose 3.5%, Randgold Resources Ltd. /zigman2/quotes/201432642/composite GOLD -0.05% climbed 1.9% and Glencore PLC /zigman2/quotes/201400686/delayed UK:GLEN -5.50% /zigman2/quotes/209462106/composite GLCNF -5.47% added 2.1%.
Shares of IWG PLC /zigman2/quotes/207263311/delayed UK:IWG -5.93% rallied 27% after the global workplace provider said it has received an indicative offer proposal from funds managed by affiliates of Brookfield Asset Management Inc. /zigman2/quotes/202267951/delayed CA:BAM.A -2.17% and Onex Corp. /zigman2/quotes/208667729/delayed CA:ONEX -1.80% .
Saipem SpA /zigman2/quotes/203593562/delayed IT:SPM -4.99% gained 3.7% after the Italian oil-and-gas contractor late Friday said it has signed several contracts for onshore and offshore projects valued around $380 million.
Shares of Royal Dutch Shell PLC /zigman2/quotes/204253697/delayed UK:RDSB -5.64% /zigman2/quotes/207682964/composite RDS.B -5.36% gained 0.7% after the major oil company said the potential effect from the U.S. tax reform will be favorable. The company also said it expects a charge to its fourth-quarter earnings of $2 billion to $2.5 billion following the changes to in the U.S.
In the same vein, Barclays PLC /zigman2/quotes/208409333/delayed UK:BARC -7.08% /zigman2/quotes/206581728/composite BCS -5.04% said it expects to book a 1 billion pound ($1.3 billion) charge to its 2017 accounts following the changes in the U.S., which will also reduce its Core Equity Tier 1 ratio by 20 basis points. Barclays shares closed 0.3% higher on Wednesday.
The reason European companies are taking hits from the tax reform stateside is because of the adjustment in their deferred taxes. Companies can log deferred tax assets during loss-making quarters and then use them to offset future tax payments, essentially working as tax credits in the U.S. However, those assets will be worth less on paper when the tax reform comes into effect and as the headline corporate tax rate falls to 21% from 35%.