Market News

Europe midday: Stocks rise at month's-end, analysts reserve judgement

31/10/2018 13:49

(Sharecast News) - Stocks are moving higher at month's end, mimicking a similar move on Wall Street overnight, despite another mixed batch of economic data out of the euro area. Commenting on the market action, Craig Erlam at Oanda told clients: "The final day of the month is shaping up to be a treat for investors following what has been an otherwise shocking month for stock markets. "The way markets have traded recently, I wouldn't exclude the possibility that October has one more trick in store, but the start to trade today has certainly been encouraging.

Volatility remains high and with it, anxiety, but if we can get through the next couple of days relatively unscathed, investors may start to smell opportunities and bargains and the tide could turn back in favour of the bulls." As of 1238 GMT, the benchmark Stoxx 600 was ahead by 1.67% or 5.94 points to 361.47, alongside a jump of 2.29% or 114.10 points to 5,093.32 for the Cac-40. Germany's Dax was also higher, gaining 1.51% or 170.16 points to 11,457.55, but Milan's FTSE Mibtel was a laggard, rising only 0.61% or 116.81 points to 19,114.81. Linked to the latter, speaking in Rome on Wednesday, Italian central bank governor, Ignazio Visco, took aim at the latest economic policies put in place by his government. "The growth divide between Italy and the rest of the euro area is a structural problem that can't be solved by monetary stabilization policies or by expanding the government's budget," he said. The day before, Italy's national statistics office had reported that the country's economy had flat-lined over the third quarter, instead of the quarterly growth of 0.2% which economists had forecast. In parallel, Eurostat had said euro area GDP growth had halved during the quarter, slipping from 0.4% to 0.2%, which was well-short of the 0.4% expected by markets. That prompted European Central Bank governing council member, Ardo Hansson, to say on Wednesday that "these were preliminary numbers, maybe they were a bit slower than some expected.

We have to wait and see what was behind this. "As there have been no significant, material change in one way or the other I would not make major conclusions." In terms of the latest economic data, Germany's Ministry of Finance said retail sales edged higher by 0.1% month-on-month (consensus: 0.5%). Over in Spain meanwhile, INE reported that the country's economy expanded by 0.6% quarter-on-quarter, exactly as expected.

Investors should be aware that past performance is not a reliable indicator of future results and that the price of shares and other investments, may fall as well as rise and the amount realised may be less than the original sum invested.

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