Sunday 25 August 2019

Stalled German coalition talks hit euro

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

Reuters

European shares rose yesterday as confidence over global economic activity and a retreating euro encouraged investors to brush off worries over the collapse of coalition government talks in Germany.

The German DAX rose 0.5pc, more than 60 points above the 13,000 points benchmark after reversing early morning losses that sent the index down as much as 0.5pc.

The broader pan-European STOXX 600 index added 0.7pc. In Dublin, the Iseq advanced to 6,941.25.

Chancellor Angela Merkel said her efforts to form a three-way coalition had failed, pushing Germany, Europe's largest economy, closer to a possible new election but markets were in no mood to let politics spoil their day.

The euro weakened and the news revived "a key risk factor" for the European single currency, said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

However, the German central bank said the national economy is expanding into the end of the year on strong industrial activity and firms are struggling to find workers to satisfy orders.

Global equities rose on Monday as confidence over economic growth around the world helped investors brush off concerns about the collapse of government talks in Germany, which sent the euro lower against the US dollar.

Roche rallied 5.9pc, in the best performance of the STOXX 600, after the Swiss-based drugmaker announced two trial wins.

So far in November, the STOXX 600 is down 2.2pc as investors have recently been locking in profits.

However, it is still up 6.9pc since the beginning of the year.

Irish Independent

Also in Business