Europe Markets: European stocks inch higher as Turkish lira extends rebound

Europe Markets: European stocks inch higher as Turkish lira extends rebound

European stocks edged higher in early trading Wednesday, as investors watched the continuing currency drama in Turkey, which showed some signs of stabilization.

What are markets doing?

The Stoxx Europe 600 SXXP, -0.03%  rose about 0.1% at 385.13, after ending unchanged in the prior session. Thus far this week, prices are down about 0.2%, and they could see their third straight weekly decline.

The pan-European gauge is showing a drop of 1% for the year to date.

Germany’s DAX 30 DAX, +0.17%  rose less than 0.1% 12,378.86, while France’s CAC 40 PX1, -0.01%  traded less than 0.1% higher at 5,404.13. The U.K.’s FTSE 100 UKX, -0.16%  virtually unchanged at 7,611.74, with investors looking ahead to a round of data from the country.

The euro EURUSD, -0.1499%  slipped against the dollar, changing hands at $1.1323, compared with $1.1344 late Tuesday in New York.

What is driving the market?

Investors continued to monitor the currency crisis in Turkey, which many fear could spread and have a negative impact on the European banks with exposure to the region. The region showed some signs of stabilization, with the Turkish lira TRYUSD, +4.5166%  up 3.9% against the buck, bringing its week-to-date gain to 4.7%. However, it remains sharply lower of late, having dropped about 20% thus far this month, recently hitting an all-time low.

Volatility should remain elevated, however, after Turkey raised tariffs on a number of American products, in the latest escalation in tensions between the two countries. U.S. President Donald Trump raised tariffs on Turkish aluminum and steel last week; the latest tariffs from Turkey are in response to those “conscious attacks,” according to a translation of a tweet posted by Fuat Oktay, the country’s vice president.

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Read more: Contagion from Turkish currency collapse to European banks is ‘overblown,’ says analyst

Stock movers

Shares of Vestas Wind Systems VWS, +3.23%  jumped 7.5% after it reported its second-quarter results. Separately, Siemens Gamesa Renewable Energy SA SGRE, +1.82%  rose 2.7%.

The U.K.’s Admiral Group PLC ADM, +4.45%  gained 1.8% after reporting its second-quarter results.

Among European banks, Deutsche Bank AG rose 1.1% while both Banco Bilbao Vizcaya Argentaria S.A BBVA, -0.17%  and BNP Paribas SA BNP, -0.04%  were up 1%.

GlaxoSmithKline PLC GSK, +1.58%  rose 1.3% in early trading. According to Dow Jones newswires, the company’s subsidiary has reported positive results in its first phase 3 study for an injectable two-drug regimen for the treatment of HIV.

Copper miner Antofagasta PLC ANTO, -2.50%  fell 1.7%, extending a recent decline that came after it reported results and warned about the impact of trade tensions between the U.S. and the country’s major trading partners. The stock is down more than 15% thus far this month.

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