Europe open: Stocks rise as S&P raises Spains debt outlook|
Europe stocks were mostly higher after Spain’s debt outlook was raised by credit rating agency Standard & Poor’s (S&P) and before the release of Eurozone inflation figures.
The S&P lifted its rating of Spain to stable from negative, citing a recovery in the European nation.
“We see improvement in Spain’s external position as economic growth gradually resumes,” S&P said in a statement as it affirmed the country at BBB, the lowest investment grade, and removed the negative outlook on the debt that was introduced in October 2012.
Spain first lost its top credit rating at S&P in 2009 and has since yet to receive an upgrade from any of the three main rating companies.
On today’s agenda, Eurozone consumer prices are expected to rise 0.8% in November from 0.7% in October, according to consensus.
Another report showed Germany retail sales in October fell 0.8% on the month, compared to September’s revised 0.2% decline and a forecast for an increase of 0.5%. The news saw Germany’s DAX index drop slightly by 0.01% in opening trading.
In the UK, house prices climbed 6.5% year-on-year, up from the previous month’s 5.8% jump, Nationwide figures showed. Economists had pencilled in a 6.2% rise.
It was the biggest jump since July 2010 and vindicated Bank of England Governor Mark Carney’s view that house prices are continuing to accelerate as he announced a scaling back of the Funding for Lending Scheme yesterday.
The central bank is going refocus the scheme, which helps increase mortgage lending to home-buyers and businesses, to focus solely on helping small firms that find it hard to borrow in an effort to curb rising prices and the risk of a housing bubble.
Chief UK and European Economist at IHS Global Insight, Howard Archer, said house prices look set to see further strong increases over the coming months despite BoE’s end to its Funding for Lending Scheme.
He expects to see another marked rise in December and an increase of about 8% in 2014, driven mostly by London and parts of the South East.
Archer added that “the decision of the Bank of England and the Treasury to end Funding for Lending support for lending to households from January looks a highly sensible decision, although in itself it is unlikely to act as a major brake on housing market activity”.
“We believe that it is very important that the Bank of England has indicated that it is prepared to take further action to rein in the housing market if prices rise markedly amid ongoing strengthening activity.”
Also in the UK was the release of GfK’s consumer confidence report which registered a surprise decline in October.
The sentiment index fell to a seasonally adjusted -12, compared to -11 the month previous. The figure had been expected to rise to -10. There has not been a month-on-month decline since mid-2011.
British consumers were concerned about their personal financial situations and felt less confident about making large purchases despite signs of an improving economy, the data showed.
Mining stocks gain
A gauge of mining stocks rallied including Antofagasta, Fresnillo and Rio Tinto rallied as the price of gold, copper and silver gained.
Credit checking firm Experian slumped after receiving a downgrade from Goldman Sachs
BNP Paribas gained after France’s biggest bank said it became the first foreign lender to sell bonds denominated in forint on expectations that Hungary’s economy and its currency will rebound from a slump.
The euro fell 0.2% to $1.3603
Brent crude futures rose $0.009 to $110. 870 per barrel on the ICE.