European stocks rise for 5th day as banks rally after RBS settlement

European stocks moved mostly higher on Thursday, tracking advances in the U.S. and Asia and with banks leading the charge up after Royal Bank of Scotland agreed to smaller-than-expected settlement with the U.S.

Several European markets were closed for Ascension Day, including Switzerland, Austria, the Nordics and Greece.

In the U.K., traders were waiting for the Bank of England to deliver its latest rate announcement and release its quarterly inflation report.

Read: The pound at $1.3850 or $1.3350? It all rests on the BOEs Super Thursday, ING says

What are markets doing?

The Stoxx Europe 600 index
SXXP, -0.16%
was marginally higher at 392.55, after closing at its highest level since Feb. 1 on Wednesday. A win on Thursday would mark a fifth straight session of advances, which would be its longest winning run since early March.

Germanys DAX 30 index
DAX, +0.44%
picked up 0.5% to 13,001.30, while Frances CAC 40 index
PX1, -0.07%
rose 0.1% to 5,540.18. The U.K.s FTSE 100 index
UKX, -0.24%
was up 0.1% at 7,672.80.

The euro
EURUSD, +0.1941%
was trading at $1.1869, up from $1.1853 late Wednesday in New York. The pound
GBPUSD, +0.3100%
fetched $1.3546, unchanged from late Wednesday.

What is driving markets?

European markets picked up the baton from Asia and the U.S., where stocks closed higher in Thursdays and Wednesdays sessions respectively. The gains came as traders shook off the geopolitical uncertainty stemming from President Donald Trumps decision to pull the U.S. out of the Iran nuclear deal. The move also spurred a rally in oil prices, which continued on Thursday with West Texas Intermediate crude
CLM8, +0.69%
jumping 0.7% to $71.65 a barrel.

Banks were the best performing sector in Europe on Thursday, led by Royal Bank of Scotland Group PLC
RBS, +1.87%
RBS, +4.17%
. Shares of the British bank jumped 5.4% after news it will pay $4.9 billion in a settlement with the U.S. Department of Justice over its role in the mis-selling of toxic mortgage-backed securities between 2005 and 2007. The settlement was smaller than feared and is seen as clearing the way for the U.K. government to sell its 71% stake it still holds in the lender.

The Stoxx Europe 600 Banks Index
FX7, -0.02%
was up 0.5%.

What are strategists saying?

The rise in the oil price, now up over 50% since September last year hasnt as yet prompted a re-evaluation in this years economic forecasts but as can be seen from recent weak consumer data, in Europe, the U.K., as well as the U.S., it could well be starting to have an effect in some of the more recent retail sales numbers. Paying more to fill up your vehicle leaves a lot less room for those consumer discretionary items, said Michael Hewson, chief market analyst at CMC Markets UK, in a note.

Stock movers

BT Group PLC
BT.A, -7.96%
BT, +0.62%
slumped 7.8% after the telecommunications company said it will cut 13,000 jobs over the next three years and issued a profit warning for fiscal 2019.

Randgold Resources Ltd.
RRS, -7.05%
GOLD, -0.19%
slid 8.1%. The precious metals miner said pretax profit well 27% in the first quarter due lower gold sales and higher production costs.

Next PLC
NXT, +6.71%
rose 6.5% after the British retailer raised its full-year pretax profit guidance.

UniCredit SpA
UCG, +1.53%
added 2.6% after the Italian lender said net profit jumped 23% in the first quarter.

Related Topics European Markets Europe Investing Stocks European Central Bank

Quote References SXXP -0.62 -0.16% DAX +56.96 +0.44% PX1 -4.09 -0.07% UKX -18.25 -0.24% EURUSD +0.0023 +0.1941% GBPUSD +0.0042 +0.3100% CLM8 +0.49 +0.69% RBS +0.14 +1.87% FX7 -0.04 -0.02% BT.A -19.00 -7.96% BT +0.10 +0.62% RRS -430.00 -7.05% GOLD -0.16 -0.19% NXT +352.00 +6.71% UCG +0.27 +1.53% Show all references
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Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.

Sara Sjolin

Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.

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Volume 0
Open 391.93
High 392.77
Low 391.63
P/E Ratio 0