Market commentary: European markets rebound, People's Bank of China calms currency nerves

On Thursday European stock markets rebounded from their worst performance in 2015, after the People’s Bank of China sought to calm fears that it was restarting a currency war; Chinese central bank officials defended their handling of this week's downward plunge in the yuan and reiterated that they see no reason for it to fall much further.

The Euro currency headed for its best week against the dollar in three months after China devalued the yuan and Greece made progress toward securing a bailout. Greek legislators approved a bailout package that may unlock as much as 86 billion euros and help the nation avoid a default next week when it has to make a payment to the European Central Bank.

The single currency strengthened against all 16 major peers except the Swedish krona during the past five days.

The Stoxx Europe 600 index jumped 1%, after Wednesday’s drop of 2.7% which was the biggest one-day percentage loss since October.

Stocks that were hit hard Tuesday and Wednesday on Yuan concerns moved higher on Thursday,  among which, luxury-good makers; shares of LVMH Moët Hennessy Louis Vuitton SE climbed 3%, Gucci-maker Kering SA rose 1.5% and Hermes International SCA picked up 1%

Most U.K. stocks advanced after two days of losses for FTSE 100.

TUI AG surged 6.6 percent after the tour operator said profit growth will be at the upper end of its forecast despite the recent terror attacks in Tunisia that shaved 10 million euros off earnings as tourists turned away from the popular North African vacation spot.

Economic uncertainty in Greece also weighed on TUI's performance at the end of June and in the first half of July, but the company said it has seen an improvement in Greece bookings in more recent weeks and cumulative bookings remain ahead of the same period last year.

Vodafone Group Plc and Barclays Plc, among members with the biggest weighting on the FTSE 100, rose 1.3 percent or more.

Randgold Resources Ltd. dropped 3.2%, giving back a portion of Wednesday’s 5.4% rise and ending a seven-session run of wins.

Luxury-goods maker Burberry Group PLC which counts China as a key market, picked up 0.1% on Thursday after their shares had slumped 3.5% on Wednesday and 4.4% on Tuesday.

In the US stocks closed flat after a choppy session. The S&P 500 declined 0.1% and the tech-heavy Nasdaq Composite Index shed 0.2%.

Tesla Motors Inc. moved nearly 2% higher Thursday after the electric-car company run by Elon Musk filed to issue a secondary offering of 2.1 million of its stock.

King Digital shares fell 7.6% to $14.05 on heavy volume after the “Candy Crush” maker topped Wall Street estimates but said gross bookings for the second quarter dropped 13%.

Stock investors are contending with the prospect of a U.S. economy that appears healthy enough to warrant what would be the first interest-rate increase by the Federal Reserve in nearly a decade, while also grappling with this week's move by China to devalue its currency to help boost exports and support its shaky economy which is feared to be slowing down faster than expected.

Stocks expected to see active trading today due to earning announcements are Wal-Mart Stores, Inc., Kingfisher plc, Best Buy Co. and AG Growth International Inc.

This article was issued by Andrew Cassar Torreggiani, Trader/Analyst at Calamatta Cuschieri. For more information visit, www.cc.com.mt .The information, views and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri & Co. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.