Europe’s main stock gauge returned to the black on Tuesday, after a weaker start to the week as major oil companies climbed on an extended run for crude prices and investors looked ahead to the start of the Federal Open Market Committee meeting.
What are markets doing?
The Stoxx Europe 600 SXXP, +0.46% was up 0.4% to 383.83, after a six-session win streak came to a halt with a loss of 0.6% on Monday.
Germany’s DAX 30 DAX, +0.19% added 0.3% to 12,384.18, while France’s CAC 40 PX1, +0.05% gained 0.2% to 5,487.76. The U.K.’s FTSE 100 UKX, +0.66% rose 0.5% to 7,493.81.
The euro EURUSD, +0.2298% firmed up to $1.1761 versus $1.1749 late Monday, while the pound GBPUSD, +0.3811% traded at $1.3163, up from $1.3119 late Monday.
What is driving the market?
A big driver for Europe was Brent oil LCOX8, +1.00% which extended four-year highs from Monday. Looming U.S. sanctions on Iran have been a support for prices, while over the weekend, major oil producers showed no sign of boosting production, despite pressure from U.S. President Donald Trump.
Need to know: All this bullishness over oil may be headed over a cliff
There was some optimism surrounding the Italian budget proposal, due to be presented by the country’s government this week. There had been concerns that the budget could spark tensions between its politicians and the European Union.
And that could be a risk factor for the euro, which got knocked down from a session high of $1.1775 after European Central Bank chief economist Peter Praet played down Monday’s euro-moving comments from ECB President Mario Draghi. The euro rose Monday after Draghi said underlying eurozone inflation should strengthen.
Otherwise, investors were largely focused on a two-day Federal Reserve meeting that concludes Thursday. The Fed is expected to deliver a 25-basis-point interest rate increase.
Read: 10-year Treasury yield rises above 3.10% ahead of Fed decision
What are strategists saying?
Among the oil gainers, BP PLC BP, +2.52% “ BP., +2.91% shot up 2.3%, Total SA TOT, +2.04% FP, +1.28% rose 1.5% and Royal Dutch Shell PLC RDS.A, +2.44% RDS.B, +2.36% rose 2%.
Next PLC NXT, +7.69% shot up nearly 10%, a top gainer for the Stoxx Europe 600 as the retailer posted a healthy profit rise and better-than-expected sales in August.
On the other end, BMW AG BMW, -5.10% slumped 5% and was a top decliner as the German auto maker cut its profit view, blaming new testing regulations in Europe and trade worries. BMW’s losses weighed on other German auto makers, with Daimler AG DAI, -2.37% down 1.8% and Volkswagen AG VOW3, -1.78% off over 4%.
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