Stock markets rally as France vows to boost security spending - business live

Discussion in 'Market News' started by Lily, Nov 17, 2015.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Shares jump in Europe as French PM says security spending will take priority over deficit reduction targets

    11.38am GMT

    Italy, Spain, Austria and Lithuania have all been told that their budgets for 2016 risk breaking EU targets:

    Four euro zone countries risk breaking EU rules with 2016 budgets via @ReutersUK

    11.30am GMT

    The Paris stock market continues to climb - now up 113 points, or 2.3%, at 4918.

    $CAC +2.35%

    11.24am GMT

    Commission vice-president Vladis Dombrovskis has also indicated that Brussels won’t try to block France’s new security spending blitz.

    I’m “confident that we can find a way” to adjust budget targets to account for the events in Paris, he told Bloomberg TV.

    Work of art: Watching @HansNichols in action as @VDombrovskis about to go live on @BloombergTV

    11.06am GMT

    Pierre Moscovici’s team have also tweeted that the Commission will show an “intelligent and humane” approach to Paris:

    .@EU_Commission a une approche intelligente et humaine. Pacte de stabilité pas rigide mais flexible. @ecfin #ParisAttacks

    11.04am GMT

    The European Commission has just backed France’s decision to boost security spending at the expense of deficit reduction.

    Economic and financial affairs commissioner Pierre Moscovici has told reporters in Brussels that the EC will show “full understanding” of France’s situation, after Paris said it will not get its deficit below the target of 3% of GDP by 2017.

    “One thing that is clear in the current circumstances is that in this terrible moment the protection of citizens, the security of citizens in France and Europe is the priority.”

    .@pierremoscovici "nous comprenons priorité sur securité. pacte de stabilité n'empêche pas choix legitimes des gouvernements" @EU_Commission

    10.48am GMT

    France’s pledge to spend whatever it takes to defeat ISIS is pushing shares higher still.

    President Francois Hollande is looking to flout EU rules over budget deficits in order to cancel defence cuts, while promising heightened security across the board. The fiscal boost of expansion of defence spending is likely to be something that will play out across Europe as the war against ISIS intensifies and the 4% rise in BAE shares so far this week perfectly illustrates this.

    The downing of a Russian plane over Egypt by ISIS-linked terrorists only goes to expand the idea that military spending will rise globally over time.

    Related: FTSE jumps nearly 2% with security group Smiths leading the way

    10.20am GMT

    German investor confidence has bounced back.

    Data just released by the ZEW institute showed that economic sentiment rose in October, despite the slowdown in emerging markets this summer.

    German #ZEW raises despite #ParisAttacks in November. German economy should perform well in the final quarter 2015.

    German econ sentiment rebounds. ZEW expectations of growth jumps to 10.4 in Nov. Markets ignore ZEW. Euro at $1.0662

    10.09am GMT

    These falling prices do raise fears that Britain is heading into deflation.

    But Ian Stewart, chief economist at Deloitte, argues that negative inflation should be welcomed:

    “Falling prices of essentials, including food and energy, are delivering a windfall bonus to UK consumers, bolstering spending power and enabling consumers to spend more on cars and “big ticket” items.

    This reduction in prices, combined with rising real incomes and ultra-low interest rates, should help the UK recovery plough on despite the headwinds from emerging markets.”

    10.04am GMT

    A reminder from RBS that cheaper oil played a key role dragging down UK inflation:

    UK inflation & changes in the price of oil. The special (post-crisis) relationship.

    9.58am GMT

    Something curious happened in the drinks sector last month too.

    9.52am GMT

    Education prices dragged back inflation in October, according to the ONS.

    Another downwards push on UK #CPI inflation came from past university tuition fee rises washing out of the numbers #GBP #BoE

    9.45am GMT

    This chart shows which items are cheaper than a year ago, and what still costs more:

    9.39am GMT

    UK inflation has been bobbing around zero all year:

    9.34am GMT

    UK inflation was minus 0.1% year-on-year in October, meaning prices are still falling (a little) across the economy.

    That matches September’s reading, and is the first time the annual CPI has fallen two months running since the series was created in 1996.

    9.15am GMT

    The boss of budget airline easyJet has predicted that passengers won’t be deterred by the Paris attacks.

    “If you look at any tragic event that has happened – and it’s been terrible what has happened in Paris and we have over a thousand people out there – post-9-11 and post-7-7 things start to get back and people get mobile and they want to travel again,”

    “Our profitability has been driven by more passenger demand … There is a real demand for travel and I don’t think that’s going to abate.”

    Related: EasyJet's profits hit record for fifth consecutive year

    8.45am GMT

    Speculation that the European Central Bank will ease monetary policy next month is pushing the euro down.

    The single currency has hit $1.10647 against the US dollar - the lowest since early April.

    Mario Draghi and the #ECB will be happy to see the Euro at 1.065 and the UK Pound £ at over 1.42 #QE #CurrencyWars

    8.40am GMT

    Tony Cross, analyst at TrustNet Direct, sums up the morning:

    London equities are certainly making good progress shortly after the open, with the vast majority of FTSE-100 constituents in positive territory and the index as a whole already having added in excess of 1%.

    Strong gains in both US and Asian sessions appears to be the driver here, although it’s difficult to pin the move on any single piece of fundamental data – but it’s clear that at least for now, the majority of stocks globally remain unfazed by last week’s terrorist attacks in Paris.

    8.38am GMT

    Confidence is rippling through Europe’s stock markets, pushing the main indices all higher this morning.

    There are solid gains in London, Paris, Frankfurt and Milan.

    8.28am GMT

    French hotel group Accor was one of the big fallers on Monday, dropping 7% at one stage.

    But it’s leading the risers on the Paris market index today, up nearly 2%:

    8.17am GMT

    France’s prime minister has confirmed that Paris will not be sticking to the budget rules imposed by Brussels, as it beefs up its security spending.

    The deficit target will “necessarily be exceeded” as France amends budget plans to hire 10,000 more police and gendarmes and boost their resources, Valls told France Inter radio.

    “The European Commission must understand,” Valls said, that the struggle against Islamic State militants “concerns France but also concerns Europe”.

    8.03am GMT

    European markets are open, and rallying.

    The FTSE 100 has jumped by more than 1%, gaining 70 points to 6215.

    8.00am GMT

    World stock markets are pulling a ‘stunning u-turn’ today, says Mike van Dulken of Accendo Markets.

    It’s a sign of the times how easily markets can digest such geopolitical horrors and demonstrate such resilience in the face of atrocity.

    Stock market gains comes in spite of lingering worries about a slowing China (Copper has hit fresh 6 year lows) and the US dollar hitting new highs as traders price in a December US rate hike and global central bank policy divergence.

    7.53am GMT

    It’s Turnaround Tuesday in Tokyo.

    Having shed 1% on Monday following the awful events in Paris, Japan’s benchmark index recovered its losses - and more - today to finish 1.2% higher.

    “Investors think that the attacks in Paris would have little impact on the global economy in the long-term.”

    7.41am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    World stock markets are rallying today, as international investors put aside worries that the tragic attacks in Paris will derail the global economy.

    Related: Billions wiped off European travel shares after Paris attacks

    Updated European opening calls courtesy of IG #FTSE +107, #DAX +148, #CAC +90

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