May 30, 2016 / 4:16 PM / 2 years ago

German shares end at one-month high, PostNL surges

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details) Updates prices)

* Germany’s DAX index ends at one-month high

* Volumes thin with UK, U.S. markets shut

* PostNL shares advance over 3 percent

By Atul Prakash

LONDON, May 30 (Reuters) - German stocks climbed to their highest in around one month on Monday as investors bet the euro’s weakness against the U.S. dollar would help German exporters.

The DAX ended up 0.5 percent at 10,333.23 points as the euro fell after Federal Reserve Chair Janet Yellen said late on Friday the Fed should raise interest rates “in the coming months” if the economy picks up as expected and jobs continue to be generated.

Some analysts said the market would keep a close eye on economic indicators for the market’s direction in the near term.

“The pulse for this argument is very much dependent on the economic data,” said Naeem Aslam, chief market analyst at Think Markets. “If the economic data doesn’t confirm that the economy is in a shape to withstand another rate hike, then traders may just reverse their positions.”

The euro zone’s Euro STOXX 50 index rose 0.4 percent and France’s CAC added 0.3 percent. Volumes were thin with both London and New York markets closed for holidays.

Analysts and fund managers said the recent rally in European equities could fade if the impetus from a weak euro fades. A weaker euro makes European goods cheaper overseas and competing foreign goods more expensive.

“The return to U.S. rate hike expectations have re-opened the possibility of short-term outperformance for European stocks, but a dollar stuck in a range can hardly create a durable momentum of outperformance,” said Didier Duret, global chief investment officer at ABN-AMRO Private Banking.

Among other movers, Dutch mail operator PostNL rose 3.5 percent following Belgian rival BPost’s failed attempt to take over the company.

The companies said on Friday they had discussed a friendly public offer by Bpost for all of the shares of PostNL but had failed to agree terms for a deal. Some traders said although the talks did not proceed, the approach raised the prospect of other takeover attempts in the future.

Today’s European research round-up

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

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Mike Dolan, Markets Editor EMEA. (Additional reporting by Danilo Masoni in Milan, editing by Larry King)

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