The European equity markets built onto yesterday’s gains and rallied on Wednesday, in response to strong gains on the mining and energy stocks amid higher oil prices, after Saudi signaled that an output agreement would be reached with its rival Iran.
While the banking sector woes triggered by the Deutsche bank appears to have eased, after the German biggest lender agreed to sell its UK insurance unit Abbey Life Assurance Co. to Phoenix Group Holdings for 935 million pounds. Shares of the bank jumped +3.3%.
Meanwhile, Germany's DAX 30 index rises +1.35% to 10,501, while the UK's FTSE 100 index jumps +0.90% to 6,870. Among the other indices, the French CAC 40 index rockets +1.24% to 4,453, while the pan-European Euro Stoxx 50 index rallies 1.58%, erasing its monthly decline.
Markets now digest the latest remarks from ECB Chief Draghi and BOE MPC member Shafik, and look forward to the US data and Fed Yellen’s testimony due later in the NA session.
FTSE: Technical levels
Carol Harmer, Founder at charmertradingacademy.com, noted, “No change really....After the initial flurry on the open where we spiked to 6865 the rest of the day say us drift lower with no real conviction. We are looking slightly oversold on the 60 min charts...therefore we may well see the market trade higher on the open to alleviate this pressure...However there is some work to do on the topside before we can safety go long....Now the med term charts are still pointing lower from much higher levels...on the stochastics...so again...any rallies currently seem to be short lived and we see the sellers standing firm on this one...and looking to defend 6865/72 quite ferociously.”
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