Fiat Chrysler's shares rally after report of takeover offer
European stocks on Monday bounced back from last week's sharp losses after senior U.S. officials over the weekend sought to play down the risk of a nuclear conflict with North Korea.
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The Stoxx Europe 600 index rallied 1.1% to close at 376.16, winning back parts of the 2.7% loss it suffered last week.
On Friday, the pan-European benchmark dropped for a third straight day to close at its lowest level since late February, after a war of words between U.S. President Donald Trump and North Korean leader Kim Jong Un sparked fears of a nuclear war.
However, on Sunday U.S. Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson wrote in The Wall Street Journal that the Trump administration was seeking diplomatic solutions (http://nation.foxnews.com/2017/08/13/mattis-and-tillerson-were-holding-pyongyang-account) to achieve the "irreversible denuclearization" of North Korea.
Additionally, national security adviser H.R. McMaster and Central Intelligence Agency Director Mike Pompeo agreed that a conflict is avoidable and that an attack by North Korea doesn't appear imminent.
"There is clearly a coordinated effort to ease the tensions between the two countries and it might be the first step towards a more stable geopolitical environment after a period of elevated rhetoric," said Konstantinos Anthis, researcher at ADS Securities, in a note.
"The easing of tensions -- should it not be short-lived -- is a positive catalyst for the high-beta European currencies like the euro and the pound. If the possibility of a conflict is reduced then both currencies should receive fresh inflows especially after showing impressive resilience throughout the past week, which hints at their strong fundamental backing," he added.
The euro on Monday bought $1.1787, down from $1.1823 late Friday in New York. The pound fetched $1.2982 compared with $1.3011 on Friday.
Stock movers: Shares of RWE AG (RWE.XE) rose 2% after the German utility company said profit rose in the first half of the year and that it will pay out a special dividend.
Fiat Chrysler Automobiles NV (FCA.MI) soared 8.2% after Automotive News reported (http://www.autonews.com/article/20170814/OEM/170819914/chinese-automakers-covet-fca) that a well-known Chinese car maker made at least one offer this month to buy the Italian- and U.S.-listed company (FCA.MI) . The bid was rejected because it wasn't high enough, according to Automotive News.
TUI AG climbed 4.8% after Credit Suisse lifted the travel operator to neutral from underperform, according to Dow Jones Newswires.
Indexes: Germany's DAX 30 index jumped 1.3% to 12,165.12, after ending last week with a 2.3% drop.
France's CAC 40 index gained 1.2% on Monday, while the U.K.'s FTSE 100 index added 0.6% to 7,353.89 (http://www.marketwatch.com/story/ftse-100-rebounds-from-3-month-low-as-north-korea-tensions-subside-2017-08-14).
Economic data: Industrial production in the eurozone fell 0.6% in June (http://www.marketwatch.com/story/eurozone-factory-activity-slides-in-june-2017-08-14) compared with May, indicating that the region's economy may be settling down after a growth spurt in the beginning of the year.
(END) Dow Jones Newswires
August 14, 2017 12:13 ET (16:13 GMT)