European Stocks in Biggest Rally Since U.S. Election Before ECBby
Stoxx 600 moves out of bearish channel, rises above resistance
CAC 40 turns positive on the year; FTSE MIB, IBEX, SMI lag
European stocks on Wednesday added to the previous session’s sharp gains, boosted by advances in carmakers, miners and banks. Optimism the European Central Bank will extend its stimulus program at Thursday’s meeting is helping fuel gains this week, particularly in so-called peripheral markets perceived as riskier after fallout from the Italian referendum subsided.
The Stoxx Europe 600 Index climbed 0.9 percent at the close, capping its biggest three-day rally since the U.S. election. The Euro Stoxx 50 advanced 1.3 percent to its highest level since April. This week’s gains have helped France’s CAC 40 Index erase its annual declines to rise 1.2 percent.
- The Swiss Market Index, dominated by so-called defensive shares such as food and health-care companies, is down 10 percent in 2016. Italy’s FTSE MIB is down 15 percent and Spain’s IBEX has dropped 6.1 percent.
- Spanish stocks have not yet registered improvement in the nation’s economic growth, a weakening euro and a rise in inflation, Jefferies Group LLC strategists wrote in a note, raising their rating on Spanish equities to “bullish.” Strategists at BNP Paribas had a similar call on Tuesday.
- The Stoxx 600 mirrored a rise in global equities Wednesday, and closed at its highest level since September.
- The benchmark is breaking out of a bearish channel started about three months ago, and is crossing above a key technical resistance level at 345.1 points, representing the 50 percent retracement of the index’s drop from December 2015 to February 2016.