European Stocks Turn Green as Investors Shrug-Off Banco Popular Rescue

European stocks turned positive Wednesday after the arranged rescue of Spain's
Banco Popular hit sentiment as investors prepare for U.K. elections and
testimony from former FBI Director James Comey.

European stocks turned positive Wednesday after an unsteady start that
followed the arranged rescue of Spain's Banco Popular SA by the European
Central Bank as investors prepare for U.K. elections and Senate testimony from
former FBI Director James Comey later this week.

Banco Santander SA , Spain's biggest lender, will pay €1 for Banco Popular and
raise around €7 billion in fresh capital after agreeing to take on the balance
sheet of Popular, which was deemed "failing or likely to fail" by the ECB and
the Single Resolution Board. The combined group will have 21 million customers
in Spain and Portugal and a vice-like grip on commercial retail banking in
Europe's fourth-largest economy.

The region-wide Stoxx Europe 600 index was marked 0.21% higher in the opening
hour of trading while benchmarks in Britain, France and Italy notched similar
percentage increases. Popular shares were suspended from trading by Spanish
regulators while Santander shares initially fell more than 2 but pared that
loss into a 0.3% gain by 09:15 BST to change hands at €5.79 each in Madrid.

The market's overall tone, however, was cautious even ahead of the Popular
rescue, which was announced by the ECB's Single Resolution Board at 07:00 BST,
as investors braced for Thursday's slate of major events, including a U.K.
general elections that appears nearly too-close-to-call but will undoubtedly
set the tone for the country's exit negotiations from the European Union.

Currency markets have also been active ahead of Thursday's meeting of the
ECB's Governing Council in Frankfurt, during which President Mario Draghi will
unveil fresh growth and inflation forecasts for this year and next. Investors
have been adding to cautious bets that Draghi will use the updated forecasts
to indicate an improving inflation picture in the single currency area and
signal a retreat from the Bank's ulta-loose monetary policies.

The pound was also under pressure, falling 0.1% against a weakened U.S. dollar
to trade at 1.2896 as the final polls ahead of tomorrow's vote show a firm but
narrowing leading for Prime Minister Theresa May's Conservative Party that may
be strong enough to deliver an election win but perhaps not decisive enough
for her to remain its leader.

The U.S. dollar, however, remains in a range that has kept prices close to
their lowest levels since early November ahead of a scheduled appearance by
former FBI director James Comey, who was fired by Trump earlier this year, in
front of a Senate Intelligence Committee.

Global oil prices drifted lower in overnight Asia trading, but prices were
broadly supported by the ongoing political and economic boycott of Qatar by
four of its Gulf region neighbours over accusations that it has been too soft
on extremists.

U.S. equity futures, however, indicate a positive open on Wall Street later
today, with the Dow Jones Industrial Average poised to gain around 10 points,
or 0.05%, at the opening bell, with similar percentage gains anticipated for
both the S&P 500 and the Nasdaq.

Source: Bloomberg Pro Terminal

Trader - Senan Fuchedzhiev

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