2-26-18 7:59 AM EST | Email Article

By Carla Mozee, MarketWatch

Primark-parent AB Foods climbs after upbeat sales outlook

European stocks pushed higher Monday, with investors starting the week in the mood to take on risk following Friday's rally on Wall Street and indications that U.S. stocks are set to extend their march higher.

How markets are trading

The Stoxx Europe 600 index rose 0.5% to 383.11. All sectors rose, led by the basic materials and tech groups. On Friday, the index picked up 0.2% (http://www.marketwatch.com/story/european-stocks-struggle-to-find-impetus-to-follow-us-lead-higher-2018-02-23) and that helped swing the benchmark to a weekly advance of 0.1%.

France's CAC 40 was up 0.5% at 5,344.4, and Germany's DAX 30 index tacked on 0.3% to 12,522.68. The U.K.'s FTSE 100 bumped up 0.6% to 7,284.00.

(http://www.marketwatch.com/story/european-stocks-struggle-as-hsbc-bhp-billiton-updates-disappoint-2018-02-20)The euro bought $1.2329, more than $1.2298 late Friday in New York.

Read:Italian election: Stocks to buy and avoid ahead of the March 4 vote (http://www.marketwatch.com/story/italian-election-stocks-to-buy-and-avoid-ahead-of-the-march-4-vote-2018-02-23)

What's driving markets

European stocks rose along with Asian stocks , whose markets keyed off Friday's rally on Wall Street (http://www.marketwatch.com/story/dow-futures-rise-more-than-100-points-fed-speakers-in-the-spotlight-2018-02-26) that left the major U.S. benchmarks up by more than 1% each.

Those gains came after the Federal Reserve's semi-annual monetary report may have eased worries (http://www.marketwatch.com/story/fed-on-track-for-3-rate-hikes-in-2018-but-4-no-sign-in-report-to-congress-2018-02-23) about the prospect of more aggressive policy action. U.S. stock futures leapt early Monday (http://www.marketwatch.com/story/dow-futures-rise-more-than-100-points-fed-speakers-in-the-spotlight-2018-02-26). With talk that the Fed may stick with three interest rate hikes instead of four this year, Treasury yields pulled back and the U.S. dollar fell against major rivals.

Dollar weakness helped lift up dollar-denominated metals prices such as gold and copper . The Stoxx Europe 600 Basic Resources Index was a standout Monday, rising 1.6% as shares of miners followed metals prices higher.

From the Brexit front, Jeremy Corbyn, the head of the U.K.'s opposition Labour Party (http://www.marketwatch.com/story/labour-to-seek-customs-union-after-brexit-to-keep-some-ties-with-eu-2018-02-25), said in a speech Monday that his party supports Britain creating a bespoke deal with the European Union that would give the U.K. full access to the EU's single market.

What strategists are saying

"Investors are bracing for an eventful week on the markets ahead of new U.S. Fed Reserve chair Jerome Powell's first testimony before Congress. Asian stocks remained firm, whilst European markets rose this morning. Confidence has appeared to have returned to the markets following the turmoil seen earlier this month, but traders will be following Powell's testimony closely in the coming days," said Mihir Kapadia, CEO of Sun Global Investments, in a note.

Stock movers

PostNL NV (PNL.AE) tumbled 16% after the Dutch mail and parcel carrier reduced its targets for 2020.

Volkswagen AG shares (VOW.XE) climbed 2.4%. Deutsche Bank said while the auto maker's fourth-quarter (http://www.marketwatch.com/story/volkswagen-earnings-buoyed-by-strong-sales-2018-02-23) earnings before interest and taxes missed consensus expectations, the company's underlying free cash flow "was very strong" and it sees the case for improving earnings quality. Deutsche Bank upgraded Volkswagen's major shareholder Porsche Automobil Holding (PAH3.XE) to a buy rating from hold, said analyst Tim Rokossa in a research note published Monday.

Hiscox Ltd. shares (HSX.LN) fell 2.4% as the insurer said pretax profit fell 91% in 2017 (http://www.marketwatch.com/story/hiscox-pretax-profit-falls-91-in-2017-2018-02-26) as a historic year of catastrophes led to increased payouts.

Associated British Foods PLC shares (ABF.LN) (ABF.LN) rose 2.3% after the owner of fast-fashion retailer Primark said it expects to report sales growth (http://www.marketwatch.com/story/primark-owner-ab-foods-expects-record-sales-growth-2018-02-26) at all of its divisions for the first half of fiscal 2018, apart from its sugar unit.

Off the Stoxx 600, Bank of Ireland Group PLC fell 1.4% as the lender posted an 18% decline in pretax profit in 2017 (http://www.marketwatch.com/story/bank-of-ireland-profit-down-but-will-pay-dividend-2018-02-26) but said it will pay its first dividend in ten years, or since the global financial crisis.

"The macroeconomic environment and outlook in Ireland and the U.K., which are the group's key markets, continued to be favourable in 2017, acknowledging Brexit uncertainty continues, but has had no immediate impact on credit quality," the bank said in its annual-results statement.


(END) Dow Jones Newswires

February 26, 2018 07:59 ET (12:59 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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