European Stock Markets Rebound; German May Output Disappoints
Frankfurt (July 7) European stock benchmarks recovered on Thursday, lifted by yesterday's Fed minutes, as U.K. real estate companies and home builders rebounded.
Fed minutes highlighted policymakers' concern about a labor market slowdown and of Brexit risks and appeared to further reduce the likelihood of a rate rise anytime soon. The meeting took place before the June 24 referendum outcome and some observers expect the Fed's next move will be down rather than up.
The FTSE 100 was recently up 1.49% at 6,559.77, reversing yesterday's 1.25% decline. The Dax in Frankfurt, which lost 1.67% yesterday, was up 0.97% at 9,465.12. In Paris the Cac 40 was up 1.49% at 4,146.17.
Home builders and developers in the U.K. posted gains after several days of losses amid fears that Brexit will trigger a commercial real estate and residential properties price crash.
Home builders Taylor Wimpey (TWODF) and Persimmon (PSMMY) were the second and third-largest gainers on the U.K. leader board after Anglo American, rising almost 6% apiece.
Land Securities (LSGOY) and British Land (BTLCY) were both recently up well over 4%. Great Portland Estates (GPEAF) was up more than 3% even after warning on Thursday that Brexit uncertainty would hurt the London commercial real estate market. Six property fund managers have this week suspended redemptions on commercial real estate funds.
But Macquarie analysts on Thursday published a reassuring note about the sector: "We do not expect a wholesale property crash," they said, noting that residential property yields are well above 2007 lows and commercial real estate yields "look far from demanding."