European Markets Finish Mostly Higher As Banks Rally

The majority of the European markets ended Thursday’s session with modest gains. The markets were stuck in a sideways trend throughout the session, as investors had their first opportunity to react to yesterday’s announcement from the Federal Reserve.

The Fed left interest rates unchanged yesterday, but signaled that another rate hike is likely this year. The Fed’s projections pointed to a quarter basis point rate increase later this year, with the rate hike widely expected to come at the December meeting.

The central bank also revealed that it will begin shrinking its $4.5 trillion balance sheet in October, initially allowing $10 billion in bonds to roll off each month.

The Fed announcement helped to spark a rally in shares of European banks Thursday. The bank sector also benefited from media reports that UniCredit is interested in combining with Commerzbank.

The pan-European Stoxx Europe 600 index advanced 0.28 percent. The Euro Stoxx 50 index of eurozone blue chip stocks increased 0.41 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.42 percent.

The DAX of Germany climbed 0.25 percent and the CAC 40 of France rose 0.49 percent. The FTSE 100 of the U.K. declined 0.11 percent and the SMI of Switzerland finished higher by 0.42 percent.

In Frankfurt, Commerzbank rallied 3.41 percent after Reuters reported that Italy’s UniCredit had made early approaches to authorities in Germany in order to sound-out support for a merger with the state-backed lender. UniCredit gained 2.40 percent in Milan.

ThyssenKrupp fell 3.32 percent, a day after it announced its decision to form an equal JV with India’s Tata Steel.

In Paris, pharmaceutical company Abivax dipped 0.16 percent after its first-half net loss narrowed from last year.

In London, Johnson Matthey surged 14.16 percent after the chemicals company confirmed its guidance for the current financial year ending March 31, 2018.

Building materials firm CRH rose 2.71 percent after the company said it would buy U.S. cement maker Ash Grove Cement Co in a $3.5 billion deal to expand business in North America.

Anglo American climbed 3.21 percent after Indian billionaire Anil Agarwal revealed plans to increase his stake in the company to just over 20 percent.

Capita plunged 10.79 percent after reporting a fall in first-half underlying revenue.

Eurozone consumer confidence improved for a second straight month in September to its highest level since 2001, preliminary data from the European…

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