European equity markets rebounded strongly in today’s session, showing a strong upside rally after the heavy sell-off in the last few sessions. Robust corporate earnings results by Apple and Swedbank AB improved market sentiment and increased risk appetite, while there are fresh rumours that the ECB is buying Italian covered bonds following its asset purchase program.
The DAX, CAC and London equity benchmark gained between 1.5% and 2.2%, while the big surprise came from Italy and Spain as the IBEX 35 and FTSE MIB indices gained more than 2.5%. However, the euro gave back yesterday’s gains and slid lower towards 1.270 against the US dollar.
On the macroeconomic front, we received fairly robust US housing data as existing home sales climbed 2.4% in September beating analysts’ expectations of 1.0%.
Energy stocks led the gains in the London equity market following a rebound in crude oil prices. Tullow Oil, BG Group, Royal Dutch Shell, BP and Petrofac surged between 2% and 3.4% as Brent front month futures rallied towards $86 per barrel.
Precious metals extended gains as Gold spot breached above $1250/ounce and silver climbed nearly 1% to retest $17.60. Platinum and palladium also followed the uptrend, while base metal prices were fairly mixed during the busy LME week. Copper advanced over 100 points (+1.5%) to retest $6682, while Aluminium rallied towards the key area of $2000.
Randgold, BHP Billiton, Rio Tinto, Glencore, Antofagasta, Anglo American and Fresnillo posted solid gains after climbing between 0.9% and 2.3% in today’s session.