European equity markets ended higher on Monday following the nuclear programme agreement between Iran and the six world powers boosted market sentiment and spread euphoria across global equity markets. CAC, DAX and London climbed between 0.3% and 0.88%, while Wall Street equities reported record high levels with Dow Jones trading above 16,100 points and S&P 500 surging above 1,800 area.
As expected, crude oil prices slid lower in correction, with Brent oil contract trading around $110 per barrel, while energy stocks in London also came under pressure. Tullow Oil and BP retreated 1.3% and 0.74%, respectively. However, banks and financials were the top performing stocks in London today, overshadowing any losses in mining and energy sectors. Lloyds, Barclays and Standard Chartered gained between 0.93% and 1.14%.
On the macroeconomic front, we received some fairly disappointing US economic data, which failed to make an impact on market sentiment. US pending home sales fell by 0.6% in October versus estimates for 1.0% increase, while Dallas Fed manufacturing activity dropped to 1.9 in November, against expectations for 5.0.
It seems that investors are trying to digest the nuclear programme deal as well as the possible timeframe of the QE tapering.
Tomorrow, the main focus will switch to US building permits, S&P Case-Shiller Home Price index as well as consumer confidence and Richmond Fed manufacturing index which could provide a clearer outlook regarding US economic conditions and prospects.