ECB Action Anticipation, Infineon Results Lift European Markets

Lucy Stoeva
26 Nov, 2015
New York City

Stock markets headed north on Thursday, led by a rally in technology and mining. The euro tested seven-month low against the dollar. Infineon earnings were ahead of expectations and base metals price rebound boosted mining stocks.

[R]4:00 PM Frankfurt – Stock markets headed north on Thursday, led by a rally in technology and mining. The euro tested seven-month low against the dollar. Infineon earnings were ahead of expectations and base metals price rebound boosted mining stocks.[/R]

European markets rose on Thursday, fueled by anticipation for ECB action in December, an upbeat quarterly report from chipmaker Infineon, and a rebound in base metal prices that boosted mining stocks.

The euro hit seven-month low against the dollar at a buy price of $1.0613 on the rising expectations that the European Central Bank may expand its bond-buying program.

Infineon Technologies soared 12% after the chipmaker reported better-than-expected quarterly results.

Rally in Infineon lifted the chip-making sector stocks, with STMicroelectronics up 4.7% and Dialog Semiconductor gaining 5.2%.

Mining stocks advanced on the back of recovering base metal prices.

The price of copper increased by approximately 3% on reports that China may be considering short-selling copper and other metals.

Antofagasta increased 3.3%, Anglo American gained 2.8%, and Fresnillo jumped 3%.

In London trading, FTSE 100 index gained 46.50 or 0.7% to 6,383.93 and in Frankfurt the DAX index increased 170.49 or 1.5% to 11,341.05.

In Paris, CAC 40 index jumped 60.77 or 1.2% to 4,952.37.

Infineon Technologies AG jumped nearly 14% after the semiconductor maker reported double-digit growth in both revenues and net profit, helped by the recent acquisition of International Rectifier and one-time tax gain.

In the September quarter, net profit rose 80% to €325 million ahead of expectations of net profit of about €160 million.

Revenue increased 36% to €1.60 billion in comparison with the same period a year ago.

Infineon estimated revenue growth of 11% to 15% for the current fiscal year.

The company proposes a dividend increase to €0.20 per share, ahead of expectations.

On the negative side, shares of BHP Billiton Ltd. fell 3% after the mining giant had to deny claims of the United Nations that that the mud in the Brazil dam disaster is toxic.

In addition, JP Morgan downgraded the stock to ""underweight"" because of the downside risk to copper prices.

Marston’s PLC gained 2.8% to 164.05 pence after the U.K.-based alcohol and soft drinks maker reported revenues in the year ended on October 3 advanced 7.8% from a year ago to £878.6 million.

Net in the year swung to profit of £23.3 million compared to a loss of £50.7 million a year ago, and diluted earnings per share swung to 4 pence from diluted loss per share of 8.9 pence.

Shares of Rémy Cointreau SA RCO fell 2.1% after the French liquor maker said first-half profit increased due to weakness in the euro.

Without the exchange rate gains, the profit declined by 8% and sales fell by 6%.

Severn Trent Plc edged up 0.28% to 2,187 pence after the waste water services provider stated group revenues in the first-half ending in September slid 0.2% from a year ago to £896.1 billion.

Profit in the year surged 34.9% to £146.2 million compared to the previous year, while diluted earnings per share jumped to 60 pence from 44.3 pence.