European equities advance London plays catch-up

GMT 13:26 2015 Tuesday ,05 May

Arab Today, arab today European equities advance London plays catch-up

European equities
London - AFP

Europe's stock markets climbed Tuesday, with London rising as British investors nervously eyed the looming general election and played catch-up after a long holiday weekend.

In midday deals, London's benchmark FTSE 100 won 0.45 percent to 7,017.20 points from Friday's close, with less than 48 hours to go until Britons head to the polls on Thursday.

The market -- boosted also by upbeat results from troubled global banking giant HSBC -- was shut on Monday for a public holiday.

Elsewhere on Tuesday, Frankfurt's DAX 30 index gained 0.06 percent to 11,627 points and the CAC 40 in Paris added just 0.05 percent to 5,084.60 compared with Monday's close.

In foreign exchange trade, the European single currency weakened to $1.1089 from $1.1146 late in New York on Monday.

"The FTSE 100 has jumped higher, moving back above the 7,000 line as London shares play catch up with global markets after yesterday's market holiday," said analyst Tony Cross at traders Trustnet Direct.

"Gains are broad based ... shaking off any woes over the outcome of this week’s election, at least for now."

Britain's political leaders were facing a final frenetic 48 hours of campaigning from Tuesday ahead of the knife-edge vote.

Conservative Prime Minister David Cameron and Labour opposition leader Ed Miliband remain neck-and-neck and unlikely to win an overall majority, according to opinion polls.

That would spark uncertain and lengthy negotiations to form a new government, with power likely hinging on the performance of smaller parties such as the Scottish National Party and the Liberal Democrats.

"The focus is set to be on the election and then on the coalition negotiations which could be messy and which may take some time," warned senior currency strategist Jane Foley at Dutch lender Rabobank.

Frankfurt and Paris stocks had risen Monday, boosted by a weaker euro before this week's important corporate results and key US non-farm payrolls data due Friday.

- HSBC on rise -

"Equity markets are in the blue this morning ahead of the all-important US jobs report due this Friday with FTSE100 recovering from a series of sell-offs last week to climb back above 7000, helped by better than expected HSBC results," added analyst Mike van Dulken at trading firm Accendo Markets.

HSBC's share price rallied 1.72 percent to 635.20 pence as investors welcomed news that first-quarter pretax profits advanced 4.4 percent to $7.1 billion on a solid performance at its investment banking division.

That easily beat market expectations of $5.8 billion, according to analysts polled by Bloomberg. Net profits or earnings after taxation meanwhile added almost one percent to $5.26 billion.

"HSBC hammered market estimates as first-quarter pre-tax profit came in at $7.1 billion, which was 22 percent higher that the market expectations of $5.8 billion," said IG analyst David Madden.

On the downside in Frankfurt, Lufthansa shares sank 2.49 percent to 12.35 euros, despite news that it flew back into the black in the first three months of the year.

Lufthansa said in a statement it booked a net profit of 425 million euros ($473 million) in the period from January to March, compared with a loss of 252 million euros a year earlier.

Earnings were powered partly by the good performance of its Swiss and Lufthansa Cargo subsidiaries.


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