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Europe close: Stocks track gains on Wall Street as investors await UK votes

By Alexander Bueso

Date: Wednesday 13 Mar 2019

Europe close: Stocks track gains on Wall Street as investors await UK votes

(Sharecast News) - Stocks on the Continent moved higher after British MPs voted down their Prime Minister's proposal for withdrawal from the European Union and as shares on Wall Street made another attempt to crack key levels of technical resistance.
Nevertheless, ahead of two more key votes in the UK Parliament on Wednesday and Thursday evening, the risk of a no-deal Brexit could not be completely dismissed, nor could further last-minute discussions between Brussels and Westminster, although many analysts continued to hold out the hope that some sort of softer Brexit would materialise.

But everything continued to point to still very tricky negotiations ahead.

On that note, IG analyst Joshua Mahony told clients: "Everyone expects Parliament to reject a no-deal Brexit and approve an extension to article 50, but it may not be as simple as that. Ultimately whether the UK leaves without a deal is down to the EU, who must agree an extension which could come in the form of an unpalatable length of time or with strings attached."

By the end of trading, the benchmark Stoxx 600 was ahead by 0.63% to 375.60, alongside a 0.42% advance for the German Dax to 11,572.41, while the FTSE Mibtel was up by 0.57% to 20,749.20.

Meanwhile, in the States, the benchmark S&P 500 was having another go - its fifth - at pushing past the 2,810 point area.

In parallel, the pound was bouncing back 1.04% versus sterling and trading at 1.1704, while front month Brent crude oil futures were adding 1.52% to $67.69 a barrel on the ICE.

Economic news out on the Continent on Wednesday was positive, although some analysts were sceptical about taking it at face value.

Euro area industrial production bounded ahead at a 1.4% month-on-month clip in January, buoyed by strong readings in France, Italy and Spain.

As expected, data released by INE revealed a 1.1% rate of increase in the country's harmonised consumer price index in February, versus a reading of 1.0% for the previous month.

But a mix of what economists at Barclays dubbed severe automotive, weather-induced and trade headwinds dragged on German output, which fell by 0.9%.

Production in Spain on the other hand jumped by 3.6% and that in Italy by 1.7%, alongside a gain of 1.3% in France.

Commenting on the above data, Barclays's Radu-Gabriel Cristea and Francois Cabau said: "Looking ahead, downside risks stemming from US trade policy, Brexit, and Italy still loom large."

In corporate news, Volkswagen announced its plans to shrink its workforce by as many as 7,000 people, including via early retirement and by not filling vacancies, with the aim of boosting its annual profits to €5.9bn from 2023 onwards and as part of a shift towards electric vehicles and digital.

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