Europe close: Investors cheer lessened risk of 'hard Brexit'
Stocks on the Continent reversed course to finish the session modestly higher on the back of the apparent progress in avoiding a so-called 'no deal' Brexit.
"[...] The opposition Labour Party threw its support behind a second referendum if it couldn’t get its own Brexit deal over the line and Theresa May opened the door to an extension, having failed to secure amendments with the EU in time for tomorrow’s vote," said Oanda's Craig Erlam.
"These are all bullish scenarios for the pound, despite remaining the unlikely options, not only for what they put on the table but also for who they put pressure on. The ERG – a group of hardline Brexiteers – many of whom favour a harder Brexit and some no-deal, will not be pleased with the recent developments with another referendum jeopardising the whole process and an extension threatening it. That may force them to reluctantly support May’s deal, when push comes to shove."
By the end of trading, the benchmark Stoxx 600 was up by 0.39% at 373.64, alongside a gain of 0.31% to 11,540.79 for the German Dax while Milan's FTSE Mibtel was ahead by 0.11% to 20,459.59
In parallel, Sterling jumped 1.01% to 1.167 following reports that the Prime Minister was open to possibly delaying the date of Britain's exit from the European Union in a bid to avoid the risk of a 'hard Brexit'.
Also weighing in on the latest developments around Brexit, IG's Chris Beauchamp said: "‘No deal’ seems, finally, to have been pushed off the table, and while we can debate the merits of this for the UK’s negotiating position, it does at least remove this huge element of uncertainty. Markets and businesses can be forgiven for breathing a sigh of relief this morning."
What economic news there was to be had on the Continent on Tuesday also appeared to be positive.
In particular, INSEE reported that its French consumer climate gauge rose from a reading of 92.0 for January to 95.0 in February (consensus: 92.0), amid a sharp improvement in expectations for the jobs market.
An equivalent gauge for Germany compiled by GfK printed at 10.8, unchanged from the month before (consensus: 10.8), as expected.
The details of the GfK gauge were "soft", according to Pantheon Macroeconomics's Claus Vistesen, but "the survey as a whole continues to signal a rebound in consumers’ spending growth in coming quarters."