European Markets Finish Higher But Investors Remain Cautious

(RTTNews) - The European markets turned in a solid performance early Monday, but then settled into a sideways trend for the bulk of the trading session. Early gains were fueled by rising commodity prices, especially by the rebound in crude oil prices. Crude oil prices rose back above $43 a barrel after Venezuelan President Nicolas Maduro said on Sunday that a deal between OPEC and non-OPEC countries to stabilize oil markets could be announced this month.

The upward move was tempered by the overall attitude of caution among investors ahead of the Bank of Japan and Federal Reserve announcements on Wednesday. Investors are speculating that the Bank of Japan will probably cut its rates on some bank reserves further below zero. However, recent soft economic data has led most analysts to predict that the Fed will leave interest rates unchanged, but the central bank could still surprise the markets.

U.K. financial institutions stand to lose their "passporting" rights, which allows them to operate free across Europe, if the country opts for a radical exit from the EU, European Central Bank policymaker and Bundesbank Chief Jens Weidmann said.

In a joint interview given to several European newspapers, including the British daily Guardian and the German newspaper Sueddeutsche Zeitung, and published Monday, Weidmann said, "Passporting rights are tied to the single market and would automatically cease to apply if Great Britain is no longer at least part of the European Economic Area(EEA)."

Passporting rights are crucial for British financial institutions, many of whom operate from London and provide services across the EU. These rights eliminate the need for individual licenses to operate in different European countries.

The "hard" Brexit route touted by some Conservatives aims to sever all trading ties with the EU and end free movement between the country and the remaining 27 members.

Losing passporting rights could deal a severe blow to London's status as a financial services hub and many institutions would consider relocating their headquarters, Weidmann said.

The pan-European Stoxx Europe 600 index advanced 1.03 percent. The Euro Stoxx 50 index of eurozone blue chip stocks increased 1.13 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.04 percent.

The DAX of Germany climbed 0.95 percent and the CAC 40 of France rose 1.43 percent. The FTSE 100 of the U.K. gained 1.54 percent and the SMI of Switzerland finished higher by 0.80 percent.

In Frankfurt, Deutsche Bank dropped 2.38 percent to extend Friday's losses on concerns over its fragile finances.

ThyssenKrupp increased 2.66 percent and Salzgitter added 3.30 percent.

In Paris, food services and facilities management group Sodexo rose 2.45 percent after an upgrade by analysts at Raymond James Financial Inc.

Sanofi advanced 0.90 percent. The pharmaceutical giant has filed a patent infringement suit against Merck Sharp & Dohme Corp in the United States alleging infringement of ten patents.

In London, Rolls Royce Holdings advanced 1.73 percent on reports that it is reducing more than 200 positions from its middle management.

Weir Group gained 1.72 percent after analysts at JP Morgan upgraded their rating on the stock to 'Overweight.'

Glencore jumped 6.22 percent, after Credit Suisse upgraded its rating on the miner to "Outperform" from "Neutral."

Anglo American leaped 5.71 percent and Fresnillo advanced 3.34 percent. BHP Billiton gained 3.69 percent and Rio Tinto added 3.49 percent. Randgold Resources also increased 2.24 percent.

Wm Morrison Supermarkets finished up by 1.61 percent after Deutsche Bank upgraded its rating on the stock to "Hold" from "Sell."

Sky increased 2.26 percent after Morgan Stanley raised its rating on the stock to "Overweight" from "Equalweight."

Outsourcing firm Mitie Group sank 28.88 percent after a profit warning.

Novartis gained 1.35 percent in Zurich after the pharmaceutical firm released an analysis related to its heart failure drug Entresto.

Eurozone construction output growth improved strongly in July, marking a second month of growth after a three months of decline, preliminary data from Eurostat showed Monday. Construction output increased a calendar-adjusted 3.1 percent year-on-year following 0.6 percent growth in June. The latest gain was the strongest since February, when output rose 3.6 percent.

The euro area current account surplus declined notably in July from a month ago, the European Central Bank reported Monday. The seasonally and working-day-adjusted current account surplus fell to EUR 21.0 billion in July from EUR 29.5 billion in June, which was revised down from EUR 28.2 billion surplus reported earlier.

The average asking price for a house in the United Kingdom was up 0.7 percent on month in September, property tracking website Rightmove said on Monday - coming in at 306,499 pounds. That follows the 1.2 percent contraction in August.

With homebuilders seeing more serious buyers amid rising household incomes, the National Association of Home Builders released a report on Monday showing a jump in U.S. homebuilder confidence in the month of September.

The report said the NAHB/Wells Fargo Housing Market Index surged up to 65 in September from a downwardly revised 59 in August. Economists had expected the index to come in unchanged compared to the 60 originally reported for the previous month.