LONDON: European stock markets brushed aside a mixed performance in Asia earlier Wednesday to post solid gains amid some relief over the financial future of Germany’s largest bank, Deutsche Bank.
KEEPING SCORE: In Europe, Germany’s DAX rose 1 percent to 10,466 while France’s CAC-40 added 1 percent to 4,443. Britain’s FTSE 100 gained 0.8 percent to 6,865. U.S. stocks were poised for a flat opening with Dow futures and the broader S&P 500 futures unchanged.
DEUTSCHE SWINGS: Investor concerns over Deutsche Bank’s financial stability appeared to ease after Germany’s biggest lender said it had struck a deal to sell a subsidiary and stressed it was not seeking government help. The bank had seen its shares tumble this week as shareholders worried about its ability to handle a $14 billion legal claim from U.S. authorities. Deutsche Bank said it would sell its Abbey Life insurance business to Phoenix Life, both U.K.-based, for 935 million pounds (1.09 billion euros). Deutsche’s share price was up 3.1 percent following the announcement, helping finance stocks across Europe to rise in its slipstream.
ANALYST TAKE: “The resurgence of Deutsche Bank’s shares has gone a long way to restoring confidence in Europe, with fears of a banking meltdown easing for now,” said Joshua Mahony, market analyst at IG.
OPEC INTEREST: Another key interest in markets is a meeting of oil producers in Algeria. The prevailing view in markets is that OPEC countries won’t agree to freeze production in an attempt to support oil prices, as disagreements persist between regional rivals Saudi Arabia and Iran. However, following Tuesday’s big falls when doubts over a deal surfaced, oil prices have rallied somewhat. The benchmark New York rate was up 57 cents at $45.25 a barrel while Brent, the international standard, rose 59 cents to $47.10 a barrel.
ASIA’S DAY: Tokyo’s Nikkei 225 index fell 1.3 percent to 16,456.40 and the Shanghai Composite Index lost 0.3 percent to 2,987.86. Hong Kong’s Hang Seng was unchanged at 23,560.61. Seoul’s Kospi added 0.9 percent to 2,017.94 and Sydney’s S&P-ASX 200 advanced 0.1 percent to 5,492.40. Benchmarks in New Zealand and the Philippines advanced while Singapore and Indonesia declined.
CURRENCY: The euro was up 0.1 percent at $1.1224 while the dollar rose 0.4 percent to 106.64 yen.