EUROPE MARKETS: European Stocks Surge To Best Level In 16 Months On Brexit Optimism, U.S. Earnings

By Steve Goldstein, MarketWatch

European stocks on Tuesday rallied on optimism over the possibility of a deal for an agreed Brexit pact as well as better-than-forecast U.S. earnings.

After losing 0.49% on Monday, the Stoxx Europe 600 ended 1.1% higher to 394.02, its best level since May 22, 2018. Banks and insurers led the advance.

The German DAX increased 1.1% to 12629.79, the French CAC 40 added 1% to 5702.05 while the U.K. FTSE 100 fell a fraction, closing at 7211.64.

U.K. banks switched directions for a third straight session, this time rising, as they trade on the relative prospects of an agreed deal for Britain to exit the European Union. Lloyds Banking Group (LLOY.LN) and the Royal Bank of Scotland (RBS.LN) rose as Michel Barnier, the top EU negotiator, said a deal was possible this week, and Bloomberg News reported negotiators were closing in on a draft deal. The pound surged to nearly $1.28.

The FTSE 100 however was weighed down by struggles from multinationals such as GlaxoSmithKline (GSK.LN) and Unilever (ULVR.LN) , which are hurt by a rising pound.

A number of U.S. companies reported better-than-forecast earnings, including JPMorgan Chase and Johnson & Johnson, sending the Dow industrials higher.

The worst Stoxx 600 component was Wirecard (WDI.XE) , which lost 16% as the Financial Times reported that internal documents appeared to show the company was trying to inflate profit and revenue at an Irish and Dubai subsidiary.

Wirecard said it "categorically rejected" the allegations, which it called "a compilation of a number of false and misleading allegations."

(END) Dow Jones Newswires

October 15, 2019 12:10 ET (16:10 GMT)

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