European markets are trading higher today as investors reacted to a hung parliament’s scenario in the UK. Political uncertainty has surprisingly sent major European bourses higher on early Friday session, Asian markets closed in a positive territory. It looks like investors see the UK elections as an internal affair, without a major impact on global outlook.
The pan-European Stoxx 50 (EU50 on xStation5) is now up by 0.39 percent, German DAX (DE30) trades higher by 0.56 percent, French CAC 40 (FRA40) rises by 0.5 percent and even British FTSE 100 (UK100) is up by 0.6 percent (helped by weaker GBP).
The Asian session showed the Nikkei 225 (JAP225) rose by 0.52 percent, Shanghai Composite also closed in the positive territory, up by 0.26 percent.
The German DAX opened higher today with most sectors in the positive territory as investors reacted to a hung parliament’s scenario in the UK. Majority of stocks gain modestly with the HeidelbergCement AG being the best performer. Source: Bloomberg.
The HeidelbergCement AG (HEI.DE) stock rises today by 2.52 percent as the company has been given an average rating of “hold” by the ratings firms. The German based building materials company received the average one year target price at 92.86 euros suggesting that the stocks are currently trading at a 10 percent discount.
On the other end, securities analysts revised their ratings and price targets for RWE AG (RWE.DE) that is up by 1.13 percent. Commerzbank’s analysts gave the German based electricity and gas company a price target at 15 euros while currently stock is trading at around 20 euros.
The political uncertainty has sent the UK’s biggest house builders and construction material retailers to a negative territory. Berkeley Group declines by more than 4 percent in the early trading as investors are concerned that decisions about a house purchase might affect its stocks. Other UK based companies such as Sainsbury’s (SBRY.UK), Marks and Spencer (MKS.UK) also move lower as the political instability may hurt consumer sentiment.
The DAX is consolidating for quite some time now and even the UK’s election result failed to spark higher volatility across the indices. Price action remains tilted to the upside as the area between 12564 and 12491 acted as a strong support preventing further decline. Under these circumstances a probability of postponed Brexit negotiations has risen significantly and it has not caused major bourses to tumble, which could help the DAX hold its trend line and could move it higher once a resistance is broken. Soruce: xStation5