European Markets Enjoyed A Relief Rally Following Brexit Slump

(RTTNews) - The European markets ended Tuesday's session solidly in positive territory, following the sharp losses of the past 3 sessions. As the initial shock sparked by the U.K. decision to exit the Eurozone begins to subside, bargain hunters have stepped in to snap up stocks at reduced prices. The pound sterling halted its recent plunge, but remains near its lowest level in three decades.

The recovery rally in Europe today was broad based. Banks regained some lost ground, after Brexit concerns triggered heavy losses in the sector in the last few sessions. A stabilization in commodity prices also provided a boost to energy and resource stocks.

Standard & Poor's Global Ratings downgraded the sovereign ratings of the U.K. by two notches as the 'Brexit' will weaken the predictability, stability and effectiveness of policymaking. S&P lowered the ratings of the U.K. to 'AA' from 'AAA' and the outlook remained negative.

According to S&P, the lack of clarity will hurt confidence, investment, GDP growth and public finances. "Uncertainty surrounding possibly long-lasting negotiations around what form the U.K.'s new relationship with the EU will look like will also pose risks," the agency said.

Fitch Ratings also trimmed the U.K. ratings, but by one notch to 'AA' from 'AA+'. Fitch said the uncertainty following the referendum outcome will induce an 'abrupt' slowdown in short-term GDP growth, as businesses defer investment and consider changes to the legal and regulatory environment.

Fitch Ratings said Spain's election is likely to reduce the risk of a repeat of the political gridlock that followed December's election.

Nonetheless, the agency noted that the political landscape remains fragmented and the final outcome uncertain.

With no clear winner, political concessions will be required for the formation of a new government, Fitch added.

The Euro Stoxx 50 index of eurozone bluechip stocks increased 2.27 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 2.26 percent.

The DAX of Germany climbed 1.93 percent and the CAC 40 of France rose 2.61 percent. The FTSE 100 of the U.K. gained 2.64 percent and the SMI of Switzerland finished higher by 2.53 percent.

In Frankfurt, Volkswagen climbed 1.65 percent on a report it has agreed to pay up to $14.7 billion to settle claims stemming from its diesel emissions cheating scandal.

Deutsche Bank increased 0.84 percent and Commerzbank rose 1.09 percent.

In Paris, Total gained 2.64 percent. The company has been chosen by Qatar Petroleum to operate the country's biggest oil field for a period of 25 years.

Credit Agricole rose 4.20 percent and BNP Paribas increased 3.90 percent. Societe Generale also finished higher by 2.14 percent.

In London, AstraZeneca jumped 3.57 percent. The company announced that the European Commission has granted marketing authorization for its infection treatment Zavicefta.

Rolls-Royce Holdings advanced 2.68 percent after saying its overall trading in the first five months of the year had been in line with expectations.

Old Mutual soared 3.43 percent as the financial services group confirmed it plans to separately float Old Mutual Wealth on the London stock exchange.

Nestlé increased 3.31 percent in Zurich after naming Ulf Mark Schneider as its new chief executive.

UniCredit soared 2.47 percent and Intesa Sanpaolo advanced 4.77 percent in Milan on reports the Italian government is eyeing a multibillion-euro rescue of its ailing banks.

Banco Santander climbed 1.76 percent in Madrid after reiterating its financial targets for this year.

Household-appliance maker Electrolux gained 3.09 percent in Stockholm after it agreed to acquire Vintec, an Australia- and Singapore-based company which supplies climate-controlled wine cabinets in the Asia Pacific region.

Germany's import prices decreased at a slower-than-expected pace in May, figures from Destatis showed Tuesday. The import price index fell 5.5 percent year-over-year in May, slower than the 6.6 percent decline in April, which was the biggest fall since October 2009 Economists had expected a 5.8 percent drop for the month.

France's consumer confidence dropped marginally as expected in June, after strengthening strongly in the previous month, figures from the statistical office INSEE showed Tuesday. The consumer confidence index fell to 97 in June from 98 in May, which was the highest level since October 2007. In March, the reading was 94.

U.K. retail sales registered a weak growth in June, the Distributive Trades Survey from the Confederation of British Industry showed Tuesday. The retail sales balance fell to +4 percent from +7 percent in May. Nonetheless, it was better than the -5 percent balance predicted in May.

Economic activity in the U.S. increased faster than previously estimated in the first quarter of 2016, according to a report released by the Commerce Department on Tuesday. The Commerce Department said the pace of growth in gross domestic product was upwardly revised to 1.1 percent from the previous estimate of 0.8 percent.

The revised GDP growth in the first quarter compares to the 1.4 percent jump seen in the fourth quarter and the 1.0 percent increase expected by economists.

Consumer confidence in the U.S. improved by much more than expected in the month of June, the Conference Board revealed in a report on Tuesday. The Conference Board said its consumer confidence index jumped to 98.0 in June from a downwardly revised 92.4 in May.

Economists had been expecting the index to inch up to 93.3 from the 92.6 originally reported for the previous month.