European indices closed up amid stabilization of Chinese markets

08.01.2016

On Friday, European stock indexes went up as Chinese markets stabilized after on Thursday evening China announced that it has disabled its new suspension system of market trading, launched on Monday, because it did not manage to reduce volatility.

During European morning trade, STOXX EURO 50 rose 0.48%, France's CAC 40 rose 0.40%, while Germany's DAX 30 added 0.59%.

European shares strengthened after the Chinese Securities Commission has suspended the work of the system stabilizing the markets, and the People's Bank of China raised the official rate of the Yuan for the first time in nine days.

From the financial sector, French lenders Societe Generale (PA: SOGN) and BNP Paribas (PA: BNPP) gained 0.63% and 0.92%, while the German Commerzbank (DE: CBKG) and Deutsche Bank (DE: DBKGn) rose 0.96% and 1.67%.

Among the peripheral lenders, Italian Intesa Sanpaolo (MI: ISP) and Unicredit (MI: CRDI) rose 0.76% and 1.75%, while the Spanish Banco Santander (MC: SAN) and BBVA (MC: BBVA) rose 0.46% and 0.45%.

Shares of Renault SA (PA: RENA) gained 2.27% amid reports that together with Nissan Motor Co., Ltd. (T: 7201), it plans to release in the next four years more than 10 models with independent drive.

In addition, shares of Volkswagen (DE: VOWG_p) AG jumped 3.83% after the announcement that the CEO is going next week to meet with the head of the United States Environmental Protection Agency to discuss the car recall, to solve the scandal on diesel models.

The London FTSE 100 index grew by 0.65%, supported by shares of Tesco (L: TSCO), which soared 5.03% after the supermarket chain announced its intention to introduce a fee for delivery of orders «click and collect» amounting to less than 30 pounds, to ensure profitability of the service.

The UK Financial sector stocks also rose sharply. For example, shares of Royal Bank of Scotland (L: RBS) rose 1.28%, shares in Barclays (L: BARC) grew by 1.29%, while shares of Lloyds Banking (L: LLOY) and HSBC Holdings (L: HSBA) rose 1.37% and 1.39% respectively.

On the other side of Atlantic, equity markets pointed to a sharp rise in anticipation of the opening. Dow Jones Industrial Average rose 1.20%, S&P 500 also rose 1.20%, while NASDAQ 100 futures reported a growth by 1.30%.

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