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Opposite Sides of the Pond

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European markets marched into positive territory on Thursday, with trading sentiment buoyed by a rally in mining shares and after Dutch voters turned out in numbers to have their say in the country’s general election. With most of the votes counted, Prime Minister Mark Rutte’s People’s Party for Freedom and Democracy looked to have won the most seats in parliament, defeating populist, far-right candidate Geert Wilders.

Investors were also digesting the latest news from the Fed which, as expected during Wednesday’s meeting, raised interest rates by 25 basis points.

US stocks began the session on a good footing, but were unable to hold on to gains made early in the day. American shares erased gains as crude slipped back to below $49 a barrel, and gold advanced with emerging markets, as investors speculated that the Fed will lean in the direction of more accommodation as it assesses the path for future rate hikes.

BoE rate Call

The FTSE 100 held on to small but significant gains on Thursday, thereby closing at a record high. The pound jumped above $1.23 after the Bank of England voted 8-1 to hold the key interest rate at 0.25% and maintained asset purchases at £435 billion.

The decision had been as good as unanimously anticipated by central bank watchers, with many expecting the BoE to err on the side of caution until more clarity emerges on the Brexit progress and the UK’s capacity to manage outside the European Union.

Banking stocks saw strong gains during the session. In particular, the Euro Stoxx Bank Index jumped 1.1%, which meant that euro area banks have managed to recover the losses suffered in the global sell-off seen at the end of 2015.

Among European Banks, Lloyds rose 2% on Thursday and Barclays added 0.82%. HSBC shares were seesawing between gains and losses, eventually closing the session in the red.

Lufthansa, GoPro and Oracle rally

German airline Lufthansa sailed into positive territory after reporting earnings of €1.75 billion last year, which came in line with forecasts. The airline has been given a €14.50 target price by Société Générale in a research note issued to investors on Thursday. The brokerage currently has a “buy” rating on the stock. Stocks rose 5.5% on this news.

Shares in GoPro also rallied on Thursday, after the sports camera maker announced job cuts and said it expects to be profitable on an adjusted basis in 2017. Shares rose 14% as a result.

Elsewhere, shares in Oracle Corp. jumped 7.27% after the software giant reported fiscal third quarter earnings that came in above expectations.

The Calamatta Cuschieri Traders Blog is available daily on CC WebTrader. Other market coverage including coverage of the International Bond Markets is also available.

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