European stocks close highs; Investors look on FED’s meeting on Tuesday and Wednesday 

European stocks close highs; Portugal wins back investment grade status; EDF up 2.1%

• The pan-European Stoxx 600 was up 0.33 percent at the close with most sectors and major bourses in positive territory.
• Portugal’s stocks outperformed after the euro zone country returned to an investment grade rating after more than five years. The country’s PSI 20 index rose more than 1.5 percent.
• The main event for markets this week is likely to be the Federal Reserve’s monetary policy meeting on Tuesday and Wednesday.

The pan-European Stoxx 600 ended the day up 0.33 percent, with most sectors and major bourses in positive territory.

Portugal’s stocks outperformed after the euro zone country returned to an investment grade rating after more than five years. Standard & Poor’s became the first of the so-called big three credit rating agencies to upgrade Portugal to investment grade status on Friday. The country’s PSI 20 index was up more than 1.5 percent, on track for its biggest one-day gain since mid-July.

Looking at individual stocks, EDF surged to the top of the benchmark on Monday morning, after Goldman Sachs raised its stock recommendation to “buy” from “neutral”. Shares of the French utility firm were up almost 2 percent higher on the news.

Ryanair fell towards the bottom of the European index after the airline announced plans to cancel between 40 and 50 flights per day until the end of October, disrupting hundreds of thousands of planned journeys. The continent’s largest airline, in terms of passenger numbers, was down almost 2 percent.

On Wall Street, the Dow and S&P opened at record highs after a big deal in the defense sector was announced.

Federal Reserve eyed

After a dip in risk appetite towards the end of last week, Asian shares bounced back to hit decade highs on Monday, with South Korea’s benchmark leading the gains, brushing aside concerns of escalating tensions in the Korean Peninsula.

While the weekend passed with no new provocation from North Korea, the isolated regime’s nuclear weapons program is likely to take center stage once again on Tuesday, when President Donald Trump addresses world leaders at the United Nations.

Meantime, the main event for markets this week is likely to be the Federal Reserve’s monetary policy meeting on Tuesday and Wednesday. The U.S. central bank is seen as likely to take another step towards normalization.

In recent months, Canada has raised interest rates twice while Britain’s central bank shocked many on Thursday when it signaled its own coming increases.

Speaking in at the IMF’s headquarters in Washington, Bank of England Governor Mark Carney said Brexit was likely to push up interest rates and reiterated interests were likely to rise in coming months.

Elsewhere, some details of Trump’s tax plans are expected to emerge over the coming days while citizens of New Zealand and Germany both head to the polls to vote in national elections this week.

Source: CNBC – European stocks close highs; Portugal wins back investment grade status; EDF up 2.1%

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