By Barbara Kollmeyer, MarketWatch

Materials stocks provide support

Europe's main stock gauge edged higher Wednesday, set to deliver its fourth straight winning session as banks and materials stocks posted gains.

Danske Bank AS stood out among the losers as its top executive stepped down over a money-laundering scandal.

What are markets doing?

The Stoxx Europe 600 was up 0.2% at 379.48, in a week that has delivered a 0.4% rise. Shares squeaked by with a 0.1% gain on Tuesday (http://www.marketwatch.com/story/european-stocks-rise-led-by-surge-for-biotech-galapagos-2018-09-12).

Germany's DAX 30 rose 0.3% to 12,191.77, while France's CAC 40 added 0.5% to 5,387.99. The U.K.'s FTSE 100 gained 0.5% to 7,338.09.

The euro was little changed at $1.1672 against the dollar. The pound bought $1.3139, compared with $1.3147.

What is driving the market?

The pound shot up earlier Wednesday, reaching above $1.32 after U.K. inflation jumped to a surprise six-month high of 2.7%. The news boosted banks on the view that the Bank of England may be pressure into more interest rate increases after an August hike (http://www.marketwatch.com/story/bank-of-england-raises-key-lending-rate-to-075-2018-08-02).

But the pound eased back (http://www.marketwatch.com/story/uks-may-reported-to-reject-irish-border-proposal-british-pound-slumps-2018-09-19-7912642) after a report (https://www.thetimes.co.uk/edition/news/theresa-may-to-reject-improved-eu-offer-on-irish-border-3mwvjzg2r)that U.K. Prime Minister Theresa May would (http://www.marketwatch.com/story/uks-may-reported-to-reject-irish-border-proposal-british-pound-slumps-2018-09-19-7912642)reject the proposal from the EU on the Irish border.

While stocks in Asia climbed, U.S. stocks got off to a positive start.

What are analysts saying?

While U.K. banks were getting a lift for now from revived rate-hike hopes, "ambivalent implications for growth and other consumer-led activity," could eventually weigh on those stocks, said Ken Odeluga, market analyst at City Index, in a note.

"For now, bank shares are among sectors participating with gains in Continental markets, though STOXX's mining-related basic resource index is again at the front, auto and parts shares aren't far below. Further delay before Beijing responds to Washington's invitation could be the point on which global investor consensus could begin to show cracks, even as the White House weighs an ex-ante to counter-retaliate," he said.

Stock movers

Among the top decliners, Danske Bank (DANSKE.KO) dropped 4% after CEO Thomas Borgen announced his resignation (http://www.marketwatch.com/story/danske-bank-finds-200b-in-suspect-transactions-2018-09-19) amid the outcome of an internal probe that money laundering was involved in a "large portion" of more than $200 billion in transactions from a branch in Estonia.

Adecco Group AG (ADEN.EB) slumped over 6% after the temp staffing firm reported markedly slower growth (http://www.marketwatch.com/story/adecco-points-to-europe-slowdown-in-3q-performance-2018-09-19) in the third quarter for continental Europe.

On the upside, a number of mining stocks were tracking higher, with Anglo American PLC (AAL.LN) rising 3.3%, Antofogasta PLC (ANTO.LN) up 3% and Rio Tinto PLC (RIO.LN) (RIO.LN) gaining 2%.

In London, HSBC Holdings PLC (HSBA.LN) rose 1.3%, Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN) jumped 2% and Barclays PLC (BCS) (BCS) gained 1.7%.

 

(END) Dow Jones Newswires

September 19, 2018 09:47 ET (13:47 GMT)

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