European Shares Advance as FBI Exonerates Clinton, HSBC Surges

  • FBI says Democratic candidate didn’t break law with e-mails
  • HSBC climbs the most since April on surprise jump in profit

European Stocks Rally to End 11 Days Without Gains

A HSBC Holdings Plc-led rally in lenders, and the Federal Bureau of Investigation’s reiterated exoneration of Hillary Clinton’s e-mail usage propelled a rebound in European shares after their worst week since February. 

Europe’s largest bank climbed 4.6 percent after posting a surprise jump in adjusted profit and a regulatory decision boosted its key capital ratio. Glencore Plc and Antofagasta Plc rose 5.6 percent or more, pacing miners to the best performance among industry groups in the Stoxx Europe 600 Index as commodities from oil to steel advanced. PostNL NV added 3.8 percent after Belgian mail service Bpost SA revived its approach to its Dutch counterpart.

The Stoxx 600 jumped 1.5 percent to 333.84 at the close of trading, for its biggest advance since Oct. 18. The equity gauge on Friday capped its 11th consecutive day without gains for the first time since 1994 after a particularly difficult week dominated by angst about the outcome of the U.S. presidential election.

“European markets are bouncing following the FBI news,” said Jacques Porta, who manages 50 million euros ($55 million) at Ofi Patrimoine Gestion Privee in Paris. “This comes as a confirmation that markets are pro-Clinton. This helps catch up on some of the weakness seen lately but caution is very much on the agenda as nothing is certain.”

FBI Director James Comey said Sunday in a letter to Congress that the FBI maintained its opinion that Clinton’s handling of e-mails while secretary of state didn’t constitute a crime, after reviewing new communications potentially related to the Democratic candidate. His statement just over a week earlier that the bureau was looking into more e-mails sparked a selloff in U.S. and European risk assets.

The initial announcement provided a fillip to Donald Trump’s campaign for the White House at a time when most polls showed Clinton well ahead. The race has since tightened, though the Democrat holds a 2.2 percentage-point lead, according to an average of polls by RealClearPolitics. Clinton leads Trump 44 percent to 41 percent among likely voters, according to the final Bloomberg Politics national poll before Tuesday’s election.

The Stoxx 600 is still trading close to a four-month low amid investor skepticism toward the region. Mixed earnings reports, concern over the U.S. election and Brexit, as well as ongoing worries about the strength of the economic recovery and the willingness of central banks to maintain accommodative monetary policies have hurt sentiment since the equity gauge reached a four-month high in September. It is on course for its first annual decline since the height of the sovereign-debt crisis in 2011.

Earnings are also in focus today. About 60 percent of Stoxx 600 companies that have reported so far this season have beaten profit projections, while 48 percent topped sales estimates, data compiled by Bloomberg show. Analysts forecast a 4.3 percent contraction in net income this year.

Ryanair Holdings Plc rose 5.1 percent, the most since July, after announcing plans to buy back as much as 550 million euros ($608 million) of stock after record passenger numbers over the summer helped second-quarter profit beat analyst estimates. Ferrari NV jumped 6.8 percent after raising its 2016 profit target as third-quarter earnings beat estimates on initial deliveries of the $2.1 million LaFerrari Aperta.

Among stocks moving on other corporate news, Actelion Ltd. gained 1.3 percent after saying a treatment for a type of pulmonary hypertension met its primary endpoint target. Tesco Plc fell 1.1 percent as its banking operation suspended online transactions after about 20,000 customers had money fraudulently taken from their accounts.

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