Germany utilities rise after court ruling
European stocks logged modest gains Wednesday, with bank shares advancing in the wake of Spain's Banco Santander SA's deal to buy struggling Banco Popular Español SA.
Continue Reading Below
The Stoxx Europe 600 index ) pushed up 0.2% to 389.98 after falling when the session opened. The benchmark was carried higher as financial, utility, oil and gas and consumer services shares rose. But health care and basic material shares were losing the most.
Spanish banks: Wednesday's session saw the Stoxx Europe 600 Bank index rise 1.1%. Shares of its second-largest component, Santander (SAN) (SAN) , pared their loss to 0.7% after the lender acquired Banco Popular (POP.MC) for the notional amount of 1 euro ($1.13). The move came after the European Central Bank determined Popular's was "failing or likely to fail."
Santander plans to raise EUR7 billion in a rights issue to fund a cleanup of Banco Popular's balance sheet. Spain's banking sector has been on stronger footing, but Popular has been a weak link.
Other Spanish bank shares were rising, with Bankia SA (BKIA.MC) up 4.4%, CaixaBank (CABK.MC) tacking on 2.3% and BBVA SA (BBVA) claiming a 2.1% rise.
But Spain's IBEX 35 turned fractionally lower to 10,878.20. Shares of retailer Zara's parent company Inditex (ITX.MC) were off 1.3%, at the bottom of the IBEX.
Stock movers: Shares of RWE AG (RWE.XE) rose 5.1% and E.On SE (EONGY) gained 5.5%, with the German utility companies rising after Germany's top court on Wednesday ruled that a nuclear fuel tax that was in place between 2011 and 2016 was illegal.
Covestro AG (1COV.XE) dropped 3.8% after Bayer AG (BAYN.XE) further reduced its holding in Covestro (http://www.marketwatch.com/story/bayer-to-cut-covestro-stake-to-448-2017-06-07) as it prepares for its planned tie-up with Monsanto Co. (MON). Covestro was Bayer's high-tech polymers business that was floated in 2015.
Individual indexes: The Stoxx Europe 600 on Tuesday fell 0.7% (http://www.marketwatch.com/story/european-stocks-set-for-1-week-low-as-caution-sets-in-2017-06-06), ending at its lowest in nearly three weeks.
"On Thursday, markets will face the ECB monetary policy meeting, the testimony of former FBI James Comey and the U.K. General Election," said Richard Perry, market analyst at Hantec Markets, in a note. "Although the U.K. election will not start to impact markets until Thursday night, the potential volatility will be huge and traders appear unwilling to take a view with the opinion polls giving such a wide range of views."
In London on Wednesday, the FTSE 100 rose 0.3% to 7,545.29 (http://www.marketwatch.com/story/ftse-100-turns-higher-as-home-builders-get-a-boost-2017-06-07).
See:U.K. election -- the worst, best and most likely scenarios for stocks worldwide (http://www.marketwatch.com/story/uk-election-the-nightmare-best-case-and-most-likely-scenarios-for-stocks-worldwide-2017-06-01)
And:Watch for a shake-up among U.K. stocks after Thursday's election (http://www.marketwatch.com/story/watch-for-a-shake-up-among-uk-stocks-after-thursdays-election-2017-06-06)
Germany's DAX 30 was off 0.1% at 12,673.92 on Wednesday and France's CAC 40 rose 0.4% to 5,288.19. Italy's FTSE MIB rose 0.4% to 20,838.
The euro traded at $1.1264 compared with $1.1278 late Tuesday.
Read:Draghi's ECB may take 'baby steps' toward ending ultraloose monetary policy (http://www.marketwatch.com/story/draghis-ecb-may-take-baby-steps-toward-ending-ultraloose-monetary-policy-2017-06-06)
Economic news: Germany's manufacturing orders slumped 2.1% in April, partly caused by a relatively low share of bulk orders, the economics ministry said Wednesday.
(END) Dow Jones Newswires
June 07, 2017 05:16 ET (09:16 GMT)