Stocks Helped by Eurozone Sentiment as Banks See Mixed Session
LONDON -- European equity markets are seeing a positive start to the week Monday, with sentiment still bolstered by the better-than-expected U.S. nonfarm payroll numbers last week. Positivity in Europe has risen after the Greek government and its creditors agreed on the need to strengthen the country's economy and help it comply with the bailout terms.
Meanwhile, the German government confirmed today that it backs ECB President Mario Draghi's proposed bond buyback to help bring down the borrowing costs of Spain and Italy. With this, the German DAX (INDEX: ^GDAXI) is one of the strongest benchmark indexes today, up almost 0.7%.
As always, the following price moves are based on this morning's European trading.
For most of the continent, banks and lenders are some of the best performers today, helped as sentiment surrounding Mario Draghi's bond buyback proposal receives a good reception in the financial sector. French majors are leading gains, with BNP Paribas (NASDAQOTH: BNPZY.PK) up more than 5%. BNP has classically been one of the predominant stocks for investors to gain exposure to European "risk" in the equity arena, and this boost in confidence has been helping the company by proxy.
One exception to the strength in the sector, however, is UniCredit (NASDAQOTH: UNCFY.PK), which is down more than 3% following a series of downgrades on its stock. Equita SPA downgraded the stock from buy to hold because of the company's disappointing second-quarter results, while Exane BNP Paribas analysts said low profitability expectations over the long term caused it to downgrade the stock from outperform to neutral.
Elsewhere, strong earnings results from Toyota in Japan overnight are helping many of the European automakers today, offering hopes of a recovery in demand for cars. Peugeot (NASDAQOTH: PEUGY.PK) is outperforming in Paris, up 5.3%.
This comes just days after General Motors said it may have to write down its 7% stake in the French carmaker because of a worsening situation in Europe. GM said the uncertainty has been weighing heavily on its stake in Peugeot, although it did suggest it expects this to be temporary. And although GM is considering the writedown, it believes it currently has the ability to hold out for a recovery to fair value.
On the downside, pharmaceutical major Sanofi (NYS: SNY) is down 1.5% despite the FDA's approval of the company's new oncology drug, Zaltrap, for aggressive types of colorectal cancer. This also came as news emerged that Momenta Pharmaceuticals is not likely to win its patent-infringement case over copies of its blood-thinner, Lovenox, for which Sanofi makes the branded version.
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The article Stocks Helped by Eurozone Sentiment as Banks See Mixed Session originally appeared on Fool.com.
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