Traders take cue from record-setting U.S. trading session
European stocks moved broadly higher on Wednesday, with chip makers among the biggest gainers, echoing sizable gains by their U.S. counterparts.
Retailers also scored solid advances after an upbeat trading update from U.K. fashion and home chain Next PLC.
What are markets doing: The Stoxx Europe 600 index climbed 0.5% to close at 390.22, rebounding from a 0.2% decline on Tuesday.
Germany's DAX 30 index rose 0.8% to 12,978.21, while France's CAC 40 put on 0.8% to 5,331.28.
The U.K.'s FTSE 100 index added 0.3% to 7,671.11, erasing an earlier loss as the pound declined after some disappointing U.K. construction data. Sterling bought $1.3517, down from $1.3589 late Tuesday in New York when it traded around the highest level since late September.
The euro slipped to $1.2028 from $1.2061 on Tuesday, when it reached its highest level since January 2015.
Read:Dollar breaks 5-day losing run, but analysts remain downbeat (http://www.marketwatch.com/story/dollar-breaks-5-day-losing-run-but-analysts-remain-downbeat-2018-01-03)
What's driving the market: Technology stocks helped lift European markets, after chip makers boosted U.S. stocks to record highs on Tuesday and also continued higher on Wednesday. The Stoxx Europe 600 Technology Index ended up 1.7% on Wednesday, its biggest one day gain since July 19, according to FactSet.
Retailers were also trading on the front foot after Next PLC (NXT.LN) rallied 6.7%, following an upbeat trading update on the pre-Christmas period (http://www.marketwatch.com/story/nexts-online-sales-get-a-boost-from-cold-weather-2018-01-03). The U.K. retailer lifted its guidance for the fiscal year ending in January 2018, saying it now expects to report pretax profit of GBP725 million ($983 million) compared with its previous outlook of GBP717 million. The Stoxx Europe 600 retail index rose 0.7%.
Banks were down slightly earlier in the day but ended higher as investors digested the new EU trading rules (https://www.fnlondon.com/articles/a-guide-to-the-biggest-trading-changes-as-mifid-ii-goes-live-20180103) that came into effect on Wednesday. The Markets in Financial Instruments Directive--or Mifid II--is seen as representing the biggest changes to securities trading in Europe in the past decade and includes a new way of charging for investment research and caps on dark pools among other things. The Stoxx Europe 600 banks index closed 0.1% higher.
Stock movers: Shares of semiconductor companies Siltronic AG (WAF.XE) and AMS AG (AMS.EB) posted some of the strongest gains in Europe, rising 5.7% and 6.6%, respectively. Infineon Technologies AG (IFX.XE) climbed 3.3% and STMicroelectronics NV (STM) put on 3.1%.
Among retailers, Primark-parent Associated British Foods PLC (ABF.LN) (ABF.LN) gained 2.1% and Marks & Spencer Group PLC (MKS.LN) (MKS.LN) rose 1.4%. Embattled retailer Steinhoff International Holdings NV soared 32%, partly rebounding from its 93% 2017 loss that came amid an accounting scandal.
Altice NV (ATC.AE) jumped 7.7% after the Dutch telecoms company said its Altice-SFR unit has signed a broadcast distribution deal with M6 Group (http://www.marketwatch.com/story/altice-unit-signs-distribution-deal-with-m6-2018-01-03).
Major oil companies advanced, tracking a rally in crude prices (http://www.marketwatch.com/story/crude-prices-get-fresh-lift-from-extended-iran-unrest-2018-01-03) that came as antigovernment protests continued in Iran. Shares of BP PLC (BP.LN) (BP.LN) put on 1.3%, Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) gained 1.4% and Total SA (TOT) (TOT) added 1.1%.
Shares in Deutsche Bank (DBK.XE) fell 0.3%. German publication Handelsblatt said in a post to Twitter (https://twitter.com/HandelsblattGE/status/948496381420949504) that more than 30 investors have sued the bank for 740 million euros, claiming they were paid too little for their Postbank shares in 2010.
Outside the main European benchmark, Carillion PLC (CLLN.LN) lost 5.4% after the construction company said it is being investigated by the U.K.'s Financial Conduct Authority in connection with the "timeliness and content of announcements" made by Carillion between December 2016 and July 2017.
Economic news: The number of unemployed people in Germany fell by 29,000 (http://www.marketwatch.com/story/german-jobless-claims-fall-more-than-seen-in-dec-2018-01-03) to 2.44 million in December, beating forecasts of a 12,000 drop. The seasonally adjusted jobless rate was 5.5%, unchanged from November.
In the U.K., the construction purchasing managers index fell to 52.2 in December from 53.1 in November, missing analyst forecasts.
(END) Dow Jones Newswires
January 04, 2018 04:06 ET (09:06 GMT)