A strong rally for European equities

Tuesday, April 22, 2014

European equity markets posted strong gains today, on the first trading session after the long Easter holiday break. The CAC, DAX, IBEX and the London benchmark index gained between 0.9% and 2%, while the sterling continued its strong upside momentum gaining more than 0.2% against the US dollar, trading above 1.682.

Rumours about a possible M&A deal between Pfizer and AstraZeneca drove pharmaceutical companies higher. AstraZeneca surged more than 5.0% in today’s trading session, while the Shire and GlaxoSmithKline shares climbed higher by 7.6% and 5.4%, respectively.

On the negative side, mining stocks underperformed as precious metals were softer. Gold and silver continued their downtrend. Gold fell further and traded below $1300, while silver remained under pressure around $19.50. Consequently, Randgold and Fresnillo retreated by 1.97% and 1.61%, respectively, today.

XAU Gold Spot over 2 years

XAU Curncy (Gold Spot   $_Oz )  D 2014-04-22 16-32-24

XAG Silver Spot over 2 years

XAG Curncy (Silver Spot  $_Oz )   2014-04-22 16-32-58

On the macroeconomic data front, US existing home sales declined by 0.2% in March, while the Richmond Fed business index rose to +7 in April compared to -7 in March, improving market sentiment.

Tomorrow, it is a busy day on the macroeconomic data releases. China reports its HSBC Manufacturing PMI data, while in the UK the Bank of England will announce the minutes from the latest monetary policy meeting. Investors’ attention will turn to the release of the Markit Flash PMI data from Eurozone and the US as well as new home sales figures in the US. 

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