Banks lead European markets higher

The Stoxx Europe 600 Index advanced with banks outperforming after US Fed Federal Reserve chairwoman Janet Yellen's proposed replacement, Jerome Powell, signalled that he would not add to financial regulations.

Retailers got a leg up after the strongest euro-zone confidence data since 2000 underscored the region’s economic resilience. Core European bonds fell and the euro weakened even as data showed German inflation accelerated in November.

The Ftse 100 in London, meanwhile, slumped and the pound pushed to two-month highs as investors cheered reports that the UK has agreed to pay as much as £50 billion to settle its EU divorce bill, in a move that could open the door for trade talks. The UK currency was up around 0.5 per cent at €1.13 against the euro.

DUBLIN

The Iseq moved up 38 points to 6,913 in line with European peers. Financials were the main beneficiaries of a fall-off in core bond prices. A steepening yield curve is seen as a boon to banks, as they borrow on lower shorter-term rates and lend on higher long-term rates. Bank of Ireland, which also benefited from the purchase of shares by chief executive Francesca McDonagh, ticked up nearly 3 per cent to €6.58.

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Rivals AIB and Permanent TSB were also up 2 per cent each. Iseq heavyweight Ryanair was up 1 per cent at €17.66, tracking movements elsewhere in the airline sector. CRH was also up 1.1 per cent at €29.73, capping a better few days for the building materials giant.

LONDON

In UK stocks, London Stock Exchange Group shares ended the day higher by 5p at 3,805p. The group confirmed that chief executive Xavier Rolet was stepping down with immediate effect amid a row over succession plans for the top job, but will walk away with a potential £13 million golden goodbye.

The move follows a furious spat between the LSE Group and activist investor the Children’s Investment Fund Management (TCI), which accused the group’s chairman of pushing out Mr Rolet after he announced last month he would leave by the end of 2018.

Lloyds Banking Group shares rose 2.27p to 67.1p amid news that it will close 49 branches and axe almost 100 jobs partly in response to changing customer behaviour. ZPG – the company behind online property portal Zoopla – slumped 23.3p to 321.7p despite reporting a 24per cent jump in full-year revenues to £244.5 million and confirming the acquisition of a Dutch analytics firm for €30 million.

Shares in soft drink giant Britvic jumped 52.5p to 811p as investors focused on higher full-year revenues which jumped 8 per cent to £1.54 billion. Cineworld plunged 137.5p to 557p as it confirmed it was in advanced discussions with US cinema chain Regal over a $3.6 billion (£2.7 billion) takeover.

EUROPE

The French Cac 40 rose 0.14 per cent while the German Dax ended the day nearly flat. Investors were taking reports of the higher Brexit bill offer as a sign there could finally be a breakthrough in talks between British and EU officials.

Peugeot maker PSA Group saw shares fall 3.3 per cent to €17.41 . The company , which paid General Motors €1.3 billion for Opel, now wants about half of the money back after discovering the full extent of its CO2 emissions challenges and exposure to European fines, Reuters reported. PSA, which completed the acquisition in late July, said earlier this month it would need to move Opel models on to its own more fuel-efficient technology faster than planned, in order to cut carbon-dioxide emissions before new EU limits are phased in from 2020-21, backed by hefty penalties. The French carmaker has told GM it believes it is owed more than half a billion euro and intends to pursue a legal claim on the grounds that it was misled about Opel's emissions strategy, two people familiar with the matter said.

NEW YORK

The Nasdaq Composite index fell more than 1 per cent in midday trade on Wednesday as investors sold off technology stocks and moved into financials that have gained on strong economic data and comments from Fed officials on future rate hikes.

The high-flying Faang stocks – Facebook, Amazon, Apple, Netflix and Google parent Alphabet – fell between 2.3 percent and 5.3 per cent.

JPMorgan climbed 2.5 per cent and Bank of America rose 2.7 per cent, putting the S&P financial index on track for its best two-day gains in more than a year. Fed chair Janet Yellen said on Wednesday that a strengthening economy would warrant continued rate increases.

The comments come a day after Fed chair nominee Jerome Powell said that the case for a December rate hike was coming together and also hinted at lighter bank regulation.

Additional reporting by Reuters