The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 21, 2019. REUTERS/Staff
March 22, 2019
(Reuters) – European stock markets rose on Friday, relieved at the European Union’s agreement on a two-week reprieve that precludes Britain crashing out of the bloc without a deal next week.
The communique from Thursday’s meeting of EU leaders also kept the door open to a longer extension if Prime Minister Theresa May, as expected, fails at the third attempt to gain parliament’s approval for her negotiated exit deal.
After two days of losses, the pan-European STOXX 600 index rose 0.3 percent, led by 0.6 percent gains for Germany’s DAX and a 0.2 percent rise in French stocks.
As has often been the case on Brexit, London’s blue chip FTSE 100, packed with companies dependent on international revenues which tend to lose when sterling rises, dipped 0.2 percent.
The pound, fluctuating heavily in the past week on Brexit twists and turns, was up 0.3 percent in early trade.
Shares in Deutsche Bank, up earlier this week on the prospect of a merger with Commerzbank, rose more than 2 percent after disclosures showed its board members received their first bonuses in four years.
The retail sector led gains with a roughly 1 percent rise, while tech stocks, on a tear after surprisingly upbeat results from chipmaker Micron earlier this week, gained another 0.6 percent, tracking gains on Wall Street and in Asia.
German chipmaker Siltronic AG was the Stoxx 600’s top gainer with a 3.6 percent rise.
Adidas AG and Puma SE both gained after a disappointing quarterly report from rival Nike Inc which hinted at a slowing of the U.S. firm’s momentum in its home market.
Despite the relief, there were more signs of firms making preparations for a no-deal Brexit that is likely to send a depressive shock coursing through Europe’s major economies.
British low-cost airline EasyJet said on Friday it was ready to suspend the voting rights of a small number of shares to comply with rules that require 50 percent plus one share of the company to be owned by EU shareholders following Brexit.
Goldman Sachs analysts reduced the likelihood of May’s deal passing to just 50 percent, while raising the chances of “no-deal” to 15 percent. The bank continues to put the chances of no Brexit at all at 35 percent.
(Reporting by Medha Singh and Patrick Graham,)