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European shares gain on rejection of no-deal Brexit

European stocks climb to 5-month highs on Thursday after the British Parliament rejected the Brexit without a deal, although weak economic data and concerns about trade negotiations affect this growth.

european shares higher 1403

The pan-European STOXX 600 index gained 0.61 percent, having slipped from a 0.7 percent jump in early trading, by the way it was the highest level since October.

Today’s voting is likely to result in a postponement of the deadline for a British withdrawal from the EU, which was earlier scheduled for March 29, which in its turn could lead to a “tough divorce” or even a new referendum.

UK stocks rose by 0.69 percent to 7,207.50 at 12:10 GMT. Germany’s DAX climbed 0.26 percent to 11,602.30, France’s CAC 40 gained 0.70 percent, having reached the value of 5,334.29, Italy’s FTSE MIB rose a little more by 0.74 percent to 20,902.04 and the Spain’s IBEX 35 jumped over other European indices, showing the growth at 0.75 percent to 9,258.20.

Analysts at Goldman Sachs said that the likelihood that Brexit will take place without a deal decreased from 10 percent to the current 5 percent after the vote on Wednesday, despite the fact that this vote has no legal basis, but has considerable political power.

Production data in China showed weak results that have not been seen for 17 years in reports. Moreover the weak retail sales data proved once again that the second largest economy is not in its best shape.

The situation worsened by a report, that China wanted to postpone trade negotiations, which, in turn, has not been ignored by market participants, as well as the statement of President Donald Trump that he was not in a hurry to close a trade deal with Xi Jinping.

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