European equities ended higher, while precious metals extended the rally

Monday, January 13, 2014

European equity markets have posted modest gains on Monday, with CAC, DAX and the London benchmark index rising between 0.2% and 0.4%.

Banks and financial stocks supported the upside momentum as risk appetite increased following news that global regulators diluted a planned debt limit for the banking sector. On a meeting in Switzerland yesterday, the Basel Committee on Banking Supervision adjusted the “leverage ratio”. RBS and Barclays led the board after gaining 3.08% and 2.85%, respectively.

Precious metals continue their strong rally with Gold prices surging further to retest $1250 area. Thus, Randgold and Fresnillo climbed higher in today’s trading session rising by 3.26% and 3.53%, respectively. Anglo American, Mondi, Rio Tinto and BHP Billiton also followed the uptrend and gained between 0.98% and 2.2%.

However, the firmer US dollar added some pressure to energy stocks. Tullow Oil slid lower due to some profit taking following the recent speculation about possible takeover bid from Statoil, according to an article in Thomson Reuters.

The main focus will turn to the release of the US Federal budget this evening, which could provide a better outlook regarding the US economic conditions and prospects. Tomorrow, the releases of the UK CPI and PPI data as well as Eurozone’s industrial production figures will draw investors’ attention. In the US, the main focus will turn to the retail sales data and import/export prices that could provide further momentum and direction to the US dollar. 

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