Europe Stocks Hold Steady to Cap Best Weekly Gain Since December

Are Markets Pricing-In a Le Pen Win in France?

European stocks closed little changed, paring earlier losses, as banks rallied and French shares climbed after polls showed anti-euro candidate Marine Le Pen lagging rival Emmanuel Macron for the first time.

The Stoxx Europe 600 Index dropped 0.1 percent at the close, after earlier sliding as much as 0.5 percent. France’s CAC 40 Index climbed 0.6 percent to close at its highest level since August 2015.

Investors are also awaiting a speech by Federal Reserve Chair Janet Yellen after European markets close, following hawkish comments by her colleagues earlier this week that boosted bets for a March rate hike. Banks have been the biggest beneficiaries of that speculation, leading gains among industry groups and helping send the Stoxx 600 to its best weekly advance this year.

  • “The U.S. remains the key driver of markets right now. Such has been the turnaround in expectations, that a rate move looks more or less a done deal,” Michael Hewson, market analyst at CMC Markets in London, wrote in a note.
  • Traders are pricing in a 92 percent chance of a rate increase when the Fed announces its decision on March 15, up from 40 percent just a week ago, Fed fund futures show.
  • Among shares active on corporate news, Berendsen Plc slumped 11 percent after the provider of industrial laundry services forecast 2017 operating profit below estimates.
  • WPP Plc dropped 8 percent, dragging media shares to the worst performance in the Stoxx 600, after it projected slower growth and weaker new business.

— With assistance by Elena Popina

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