European stock markets rose again on Tuesday, setting the region’s benchmark index on track for a more-than two-year closing high as traders welcomed the end of the U.S. government shutdown and a round of solid corporate earnings.
What are indexes doing?
The Stoxx Europe 600 index
rose 0.2% to 403.04, on track for its highest close since August 2015.
Germany’s DAX 30 index
gained 0.8% to 13,566.52, taking out its previous record close of 13,478.86 set in November.
Spain’s IBEX 35 index
climbed 0.3% to 10,612.50 and Greece’s Athex Composite Index
rallied 0.8% to 864.78, building on solid gains from Monday in the wake of sovereign ratings upgrades.
What is driving the market?
European stocks were boosted by news late Monday that the U.S. Congress passed a three-week funding measure that brought a halt to the three-day shutdown. The bill, also signed by President Donald Trump, keeps the U.S. government running up to Feb. 8, but has done little to resolve the underlying policy fights between the Democrats and Republicans.
That means a similar shutdown could happen when the three-week stopgap bill expires if the two parties fail to reach an agreement on government-spending levels and immigration.
The dollar rebounded after the deal came through, sending the euro lower. The shared
bought $1.2244, down from $1.2262 late on Monday in New York.
German stocks were also supported by data showing economic sentiment in Europe’s largest economy rose more than expected in January. The ZEW measure of economic expectations rose by three points to 20.4 points, beating economists’ forecasts of 17.5 points.
What are strategists saying?
“It’s taken a while for the DAX to join in with the all-time high hitting performances of the FTSE and the Dow Jones seen in 2018. However, with German coalition talks steadily moving along, a stopgap deal to end the U.S. government shutdown, and a subsequent pullback from the euro against the dollar, the bourse seems ready to bulge, shooting up by 130 points to tease a 13,600 record peak,” said Connor Campbell, financial analyst at Spreadex, in a note.
Which stocks are in focus?
Shares of EasyJet PLC
jumped 5.8% after the airline posted solid fiscal first-quarter results with total revenue up 14.4%. The company also said it has secured approximately 60% of expected bookings for the second quarter, slightly ahead of the last year.
Logitech International SA
rose 5.7%. The gain came after the Swiss electronics company posted a 22% jump in dollar-denominated revenue, the biggest increase in seven years.
rose 2.5% even as the U.K. Competition and Markets Authority provisionally found the proposed acquisition of British pay-TV giant by 21st Century Fox Inc.
“not in the public interest” because of plurality concerns.