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Europe midday: Report on ECB's Draghi boosts stocks

(ShareCast News) – Reports that European Central Bank chief Mario Draghi was not planning to signal a policy shift at a key conference next week weighed on the euro, in turn giving a lift to stocks across the Continent.
As of 1203 BST, the benchmark Stoxx 600 was higher by 0.79% or 2.96 points to 379.45, alongside an advance of 0.79% or 96.53 points in Germany’s Dax to 12,274.31.

In Italy, the Milan FTSE Mibtel was ahead by 1.12% or 243.37 points at 21,965.05.

According to a sourced report from Reuters, Draghi was not planning any fresh messages for the upcoming Jackson Hole Symposium in the States.

Instead, his intention was reportedly to focus on the venue’s main theme, namely fostering a dynamic global economy, preferring to hold off on any debate until autumn.

That weighed on the euro/dollar rate,which was down by 0.28% to 1.1702, although for Michael Hewson at CMC Markets UK, as long as the pair remained above 1.1620 another move towards 1.20 continued to be the most likely scenario.

During the night Anthony H Cordesman at CSIS minimised the purported risk from North Korea’s missile test, explaining that “firing an unproven missile with an unproven warhead in an unproven re-entry vehicle with unproved accuracy and reliability at these ranges against a major nuclear power goes from stupidity to insanity.”

Nevertheless, recent events on the Korean peninsula did hold the potential for escalating tension in Northeast Asia over the next decade, he said.

Front month Brent crude oil futures were also gaining altitude, rising 0.86% to $51.24 per barrel after the American Petroleum Institute reportedly revealed a 9.16m barrel stockdraw for last week.

The Stoxx 600’s gauge of Basic Resource companies’ shares was among the best performers with an advance of 1.77% to 412.18 despite a Bloomberg report that hedge fund manager Crispin Odey was ‘shorting’ metal stocks in anticipation of slower economic growth in China.

On the economic front, Eurozone gross domestic product growth picked up from a 0.5% clip in the first three months of 2017 to a 0.6% pace in the second quarter, amid strong expansions in the Netherlands and Spain.

Later in the day, the US Commerce Department is expected to release July data on housing starts and permits, followed by the minutes of the most recent Federal Reserve policy meeting at 1900 BST.

On the corporate front, shares in Carlsberg were holding lower after the company disappointed investors by failing to raise its full-year earnings forecasts, instead reiterating it was expecting a mid-single digit increase in profits.

Maersk was headed in the other direction; despite under-delivering with its second quarter results, while company chief Soren Skou sounded a cheery note on the industry’s outlook.

Akzo Nobel reached a three-deal truce with activist hedge-fund Elliot Management.

Arcelor Mittal’s South African unit was reportedly mulling layoffs in a bid to lower costs.

Fiat was in the spotlight amid reports that a Chinese suitor had presented a bid for the company this month.

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