Europe’s main stock gauge ended Wednesday’s session higher, booking its fourth straight win thanks to gains in the materials and chemicals sectors.
Danske Bank AS stood out among the losers as its top executive stepped down over a money-laundering scandal.
What are markets doing?
Germany’s DAX 30 /zigman2/quotes/210597999/delayed DX:DAX -0.91% finished 0.5% higher at 12,219.02, while France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.80% added 0.6% to end at 5,393.74. The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.27% closed 0.4% higher at 7,330.11.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.0742% was little changed at $1.1686 against the dollar. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD 0.0000% bought $1.3161, compared with $1.3147.
What is driving the market?
The pound shot up earlier Wednesday, reaching above $1.32 after U.K. inflation jumped to a surprise six-month high of 2.7%. The news boosted banks on the view that the Bank of England may be pressure into more interest rate increases after an August hike. But the currency eased back after a report that U.K. Prime Minister Theresa May would reject the proposal from the EU on the Irish border.
Stocks in Asia climbed. U.S. stocks traded mostly higher.
What are analysts saying?
While U.K. banks were getting a lift for now from revived rate-hike hopes, “ambivalent implications for growth and other consumer-led activity,“ could eventually weigh on those stocks, said Ken Odeluga, market analyst at City Index, in a note.
“For now, bank shares are among sectors participating with gains in Continental markets, though STOXX’s mining-related basic resource index is again at the front, auto and parts shares aren’t far below. Further delay before Beijing responds to Washington’s invitation could be the point on which global investor consensus could begin to show cracks, even as the White House weighs an ex-ante to counter-retaliate,” he said.
Among the top decliners, Danske Bank /zigman2/quotes/209678580/delayed DK:DANSKE +1.49% finished 3.4% lower after CEO Thomas Borgen announced his resignation amid the outcome of an internal probe that money laundering was involved in a “large portion” of more than $200 billion in transactions from a branch in Estonia.
On the upside, a number of mining stocks were tracking higher, with Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +1.65% closing up 5.1%, Antofogasta PLC /zigman2/quotes/200173667/delayed UK:ANTO +0.16% up 5.9% and Rio Tinto PLC /zigman2/quotes/202627887/composite RIO -0.28% /zigman2/quotes/208934945/delayed UK:RIO +0.19% gaining 3%.
In London, HSBC Holdings PLC /zigman2/quotes/203901799/delayed UK:HSBA +0.13% closed up 1.8%, Royal Bank of Scotland Group PLC /zigman2/quotes/209265718/delayed UK:RBS +0.83% /zigman2/quotes/203233010/composite RBS +0.94% jumped to end 2.7% higher and Barclays PLC /zigman2/quotes/206581728/composite BCS +2.64% /zigman2/quotes/208409333/delayed UK:BARC +2.59% closed 2.2% higher.