- Title: German DAX edges up but caution prevails ahead of U.S. election day
- Date: 8th November 2016
- Summary: FRANKFURT, GERMANY (NOVEMBER 8, 2016) (REUTERS) EXTERIOR OF FRANKFURT STOCK EXCHANGE EU FLAG WIDE OF DAX INDEX BOARD TRADER WORKING ON COMPUTER DAX BOARD SHOWING CHANGES TRADER TRADING BOARD SHOWING BANK SHARES MORE OF TRADERS DAX GRAPH TRADER PIGLET FIGURINE WITH TRADING BOARD IN BACKGROUND (SOUNDBITE) (German) CAPITAL MARKETS STRATEGIST AT ODDO SEYDLER BANK, OLIVER ROTH, SAYING: "We have seen a certain relief yesterday at the stock exchange, today the DAX is only barely moving. The relief is based on the news that Hillary Clinton has clearly gained at least in the polls. The markets want calculability and this is given more with Hillary Clinton than with Donald Trump. Otherwise there are no real stimuli." ROTH TALKING TO REPORTER (SOUNDBITE) (German) CAPITAL MARKETS STRATEGIST AT ODDO SEYDLER BANK, OLIVER ROTH, SAYING: "Donald Trump has an election manifesto, which packs a punch. It's about protectionism, he wants to protect the American economy. This of course would in turn be against the free trade concept, which most economical advisors follow. If Trump would get to power, then this would massively threaten the world economy, this is not good for the companies, which is not good for the markets. Moreover he says that he would spend a lot of money, money that he doesn't have, so he would need to make new debts, this is also not really appreciated by the markets and therefore Hillary Clinton is the better choice, at least for the financial markets, because she is more calculable, because with her there is more of the same. This is not enough, but at least it is still better - in the opinion of most financial players - then the risk of voting for Trump." TRADERS (SOUNDBITE) (German) CAPITAL MARKETS STRATEGIST AT ODDO SEYDLER BANK, OLIVER ROTH, SAYING: "The new accusations surrounding Deutsche Bank of course are highly charged. Nevertheless, there are many accusations against the Deutsche Bank and they first have to manifest themselves, that means it has to come to a real lawsuit and to real investigations with a conclusion and then according to this clear accusations, so that it is of interest to the markets. Currently this is not an issue, but it could become one quite quickly for the Deutsche Bank and its battered image." TRADER WIDE OF TRADING BOARD MAN TAKING SELFIE WITH HIS SMARTPHONE WIDE OF TRADING FLOOR WRITING OF STOCK EXCHANGE FRANKFURT
- Embargoed: 23rd November 2016 09:35
- Keywords: markets Frankfurt U.S. elections
- Location: FRANKFURT, GERMANY
- City: FRANKFURT, GERMANY
- Country: Germany
- Topics: Economic Events
- Reuters ID: LVA00157L3N2L
- Aspect Ratio: 16:9
- Story Text:European shares edged higher in cautious trading on Tuesday (November 8), with encouraging updates from some companies underpinning the broader market on a day when investors' main focus stayed on the election battle in the United States.
The pan-European STOXX 600 index was trading 0.2 percent higher by 0933 GMT, after surging 1.5 percent in the previous session on improved chances of Hillary Clinton becoming the next U.S. president. Britain's FTSE 100 and Germany's DAX were both up 0.2 percent.
Clinton got a boost on Sunday when the FBI said it stood by its July finding that the Democratic candidate was not guilty of criminal wrongdoing in her use of a private email server.
Clinton, seen as offering greater certainty and stability, was ahead of Republican Donald Trump in five polls on Monday.
"We have seen a certain relief yesterday at the stock exchange, today the DAX is only barely moving. The relief is based on the news that Hillary Clinton has clearly gained at least in the polls. The markets want calculability and this is given more with Hillary Clinton than with Donald Trump," said Oliver Roth, capital markets strategist at Oddo Seydler Bank, at the stock exchange in Frankfurt on Tuesday.
Investors stayed cautious as less than five months ago Britain's shock vote to leave the European Union had defied most polls and bookmakers' odds.
"If Trump would get to power, then this would massively threaten the world economy, this is not good for the companies, which is not good for the markets. Moreover he says that he would spend a lot of money, money that he doesn't have, so he would need to make new debts, this is also not really appreciated by the markets and therefore Hillary Clinton is the better choice, at least for the financial markets, because she is more calculable, because with her there is more of the same. This is not enough, but at least it is still better - in the opinion of most financial players - then the risk of voting for Trump," explained Roth.
He also commented on new accusations against Deutsche Bank.
The U.S. Securities and Exchange Commission is investigating whether four banks including Deutsche Bank have been mishandling securities in the American Depositary Receipt (ADR) market, the Wall Street Journal reported on Monday.
The SEC has sent subpoenas to four banks over the issue - Bank of New York Mellon Corp, Citigroup Inc, Deutsche Bank AG and JPMorgan Chase & Co, the Journal reported, citing people close to the matter.
"The new accusations surrounding Deutsche Bank of course are highly charged. Nevertheless, there are many accusations against the Deutsche Bank and they first have to manifest themselves, that means it has to come to a real lawsuit and to real investigations with a conclusion and then according to this clear accusations, so that it is of interest to the markets. Currently this is not an issue, but it could become one quite quickly for the Deutsche Bank and its battered image," said Roth.
The probe, which is looking at whether the banks have broken controls designed to prevent market abuse and tax fraud, will not necessarily result in enforcement action, the report said.
A major focus of the SEC inquiry is the "pre-release" of ADRs, where banks issue depositary receipts to investors without first having the underlying shares in their custody, the Journal reported.
That means, the shares could be sold short without actually having them - a practice known as "naked short selling", which is illegal. - Copyright Holder: REUTERS
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