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European stocks moved mostly higher on Thursday, tracking advances in the U.S. and Asia and with banks leading the charge up after Royal Bank of Scotland agreed to smaller-than-expected settlement with the U.S.
Several European markets were closed for Ascension Day, including Switzerland, Austria, the Nordics and Greece.
In the U.K., traders were waiting for the Bank of England to deliver its latest rate announcement and release its quarterly inflation report.
What are markets doing?
The Stoxx Europe 600 index was marginally higher at 392.55, after closing at its highest level since Feb. 1 on Wednesday. A win on Thursday would mark a fifth straight session of advances, which would be its longest winning run since early March.
Germany’s DAX 30 index picked up 0.5% to 13,001.30, while France’s CAC 40 index rose 0.1% to 5,540.18. The U.K.’s FTSE 100 index was up 0.1% at 7,672.80.
The euro was trading at $1.1869, up from $1.1853 late Wednesday in New York. The pound fetched $1.3546, unchanged from late Wednesday.
What is driving markets?
European markets picked up the baton from Asia and the U.S., where stocks closed higher in Thursday’s and Wednesday’s sessions respectively. The gains came as traders shook off the geopolitical uncertainty stemming from President Donald Trump’s decision to pull the U.S. out of the Iran nuclear deal. The move also spurred a rally in oil prices, which continued on Thursday with West Texas Intermediate crude jumping 0.7% to $71.65 a barrel.
Banks were the best performing sector in Europe on Thursday, led by Royal Bank of Scotland Group PLC . Shares of the British bank jumped 5.4% after news it will pay $4.9 billion in a settlement with the U.S. Department of Justice over its role in the mis-selling of toxic mortgage-backed securities between 2005 and 2007. The settlement was smaller than feared and is seen as clearing the way for the U.K. government to sell its 71% stake it still holds in the lender.
The Stoxx Europe 600 Banks Index was up 0.5%.
What are strategists saying?
“The rise in the oil price, now up over 50% since September last year hasn’t as yet prompted a re-evaluation in this year’s economic forecasts but as can be seen from recent weak consumer data, in Europe, the U.K., as well as the U.S., it could well be starting to have an effect in some of the more recent retail sales numbers. Paying more to fill up your vehicle leaves a lot less room for those consumer discretionary items,” said Michael Hewson, chief market analyst at CMC Markets UK, in a note.
Stock movers
BT Group PLC slumped 7.8% after the telecommunications company said it will cut 13,000 jobs over the next three years and issued a profit warning for fiscal 2019.
Randgold Resources Ltd. slid 8.1%. The precious metals miner said pretax profit well 27% in the first quarter due lower gold sales and higher production costs.
Next PLC rose 6.5% after the British retailer raised its full-year pretax profit guidance.
UniCredit SpA added 2.6% after the Italian lender said net profit jumped 23% in the first quarter.