BUSINESS European stock markets rally on Brexit deal, Italy budget hopes

BUSINESS

European stock markets rally on Brexit deal, Italy budget hopes

AFP

20:00, November 26, 2018

European stock markets rallied Monday after Britain sealed a Brexit deal with the EU and as Italy said it could cut its budget deficit.

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Brokers are pictured at the stock exchange in Frankfurt, Germany, on June 13, 2018. (Photo: AFP)

The euro rose against the dollar but was down versus sterling.

Oil prices rebounded meanwhile, after slumping Friday to the lowest levels in more than one year.

Bitcoin extended its slide, dropping under $4,000 to $3,675.40 -- the lowest level for 14 months.

"Italian stocks have been the outperformer in Europe...on reports that the government may consider reducing its deficit target in a bid to avert a disciplinary procedure in Brussels and a backlash in the markets," noted Craig Erlam, senior market analyst at Oanda trading group.

"The pound is also a little higher... after Theresa May overcame the first, and smallest, hurdle to her Brexit deal getting over the line."

May will convene her cabinet and update parliament on the newly-agreed Brexit deal Monday, as the embattled British prime minister begins the tricky task of selling the plan to a sceptical country.

In Rome, Italy's populist government appears open to reducing its draft budget deficit, fuelling  a surge in the Milan stock market on hopes Rome could ease a stand-off with EU officials in Brussels.

Around 1115 GMT, Milan's FTSE MIB was up almost three percent compared with the close on Friday. London's FTSE 100 won almost 1.0 percent.

Earlier Monday, most Asian stock markets closed higher as investors tentatively picked up cheap stocks.

Those gains came despite more selling of shares in Asian energy firms following another collapse in oil prices Friday.

The more positive mood comes at the start of a week set to include a speech by Federal Reserve boss Jerome Powell and the release of the bank's last policy meeting minutes, before culminating in a G20 gathering in Buenos Aires.

Oil prices enjoyed a bounce but remain well beaten down after Friday's hammering, which saw WTI sink 7.7 percent and Brent more than six percent.

All eyes are now on a meeting of the Organization of the Petroleum Exporting Countries on December 6 to see if the cartel will cut output.

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