British Shares Are Bright Spot as European Stocks Pare Advancesby
Italian, Spanish equity indexes post some of biggest declines
Deutsche Bank slides in U.S. trading; Germany closed
U.K. shares climbed the most among western-European markets, while the region’s stocks were little changed, after British Prime Minister Theresa May pledged to begin the process of exiting the European Union in the first quarter of 2017.
The nation’s exporters benefited from a weakening of the pound, sending the FTSE 100 Index up 1.2 percent to its highest level since May of last year. A 17 percent jump in Henderson Group Plc after it said it will combine with the U.S.’s Janus Capital Group Inc. pushed European financial-services companies to the biggest advances among industry groups.
The Stoxx Europe 600 Index gained 0.1 percent, after rising as much as 0.3 percent and falling that amount. With the German market closed for a holiday, trading of shares on the gauge was about a fifth lower than the 30-day average. Lenders, which were in focus last month as Deutsche Bank AG tumbled to a record low, were little changed after a three-day advance.
“Europe feels a little cautious,” said Chris Beauchamp, a market analyst at IG in London. “The market is taking cues from any newsflow around banks, and the problem was that there wasn’t really anything concrete over the weekend. That means panic could still spike again and German stocks are ripe for some weakness tomorrow. The FTSE 100 is in its own world with the lower pound, which might provide a useful dynamic going into the last quarter.”
While the FTSE 100 closed 1.7 percent away from last year’s record, European shares haven’t fared as well. After jumping as much as 14 percent from a June low through the beginning of September, the Stoxx 600’s rebound lost steam last month. Deutsche Bank was particularly hurt as concerns grew over its capital buffers amid mounting legal costs. The stock, which reached an all-time low last week, slid 2.3 percent in U.S. trading. People familiar with the matter said the lender is poised to reach an agreement with labor representatives that will lead to about 1,000 job cuts in its home market.
Better-than-forecast manufacturing data for France, Italy and Spain did little to help. While the CAC 40 Index was little changed, the FTSE MIB Index fell the most in the region, weighed down by a 2.3 percent drop at Intesa Sanpaolo SpA, and the IBEX 35 Index slid 0.3 percent. For the U.K., a gauge of British factory output reached its highest level in more than two years as the weaker pound sent export orders surging.
Henderson’s deal spurred an advance at other asset managers, with Aberdeen Asset Management Plc and Jupiter Fund Management Plc up more than 5 percent. Schroders Plc climbed 2.7 percent.
Among other stocks moving on corporate news, Temenos Group AG surged 10 percent after the Swiss financial-software provider said a major European lender has picked one of its programs for retail, commercial and corporate banking. Nordea Bank AB gained 2.8 percent after the biggest Nordic bank said it’s closer to meeting stricter regulatory capital standards than the market had feared.