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Market Update

European Markets in Tentative Rebound, VW Settles U.S. Claims

Author: Sarla Buch
Last Update: 12:50 PM ET June 28 2016

4:00 PM Frankfurt – Market indexes across the euro zone rebounded but trading sentiment was tentative. Political leaders in the U.K. face a challenging task in preserving tariff free access to the European Union. Ocado net surged 19%. Volkswagen agreed to pay $14.7 billion in order to settle U.S. claims.

European markets after two days of sustained selling rebounded but traders remained unconvinced that the sentiment has reversed.

After the historic vote to leave the European Union in the U.K., world markets had erased $3 trillion in market caps and the pound had dropped to a 31-year low.

U.K. is facing several challenges and the chaotic search for new leaders has already been kicked off at the two leading parties. Moreover, the country is also facing shrinking economy and tough negotiations with the European Union in preserving to tariff free access to trading block.

In London trading, FTSE 100 index jumped 156.60 or 2.6% to 6,136.69 and in Frankfurt the DAX index increased 182.72 or 1.9% to 9,450.76.

In Paris, CAC 40 index advanced 105.74 or 2.6% to 4,089.74.

Hapag-Lloyd AG slipped 1.7% to €17.38 after Reuters reported Germany-based marine logistic company agreed to acquire United Arab Emirates-based United Arab Shipping Company for an undisclosed amount.

Ocado Group Plc jumped 9.1% to 226.60 after the online grocery retailer said revenues in the first-half ending on May 15 soared 15.1% from a year ago to £584.2 million.

Net profit in the period surged 19.4% from a year ago to £8.6 million compared to £7.2 million and diluted earnings per share increased to 1.40 pence from 1.17 pence.

Rolls-Royce Holding Plc advanced 2.8% to 670.50 pence after the aircraft engine maker reported overall trading in the first five months of the year has been “broadly in line with expectations” and the outlook for the year “as a whole is unchanged.”

The company said currency swings may increase revenue by about £400 million and pre-tax profit by about £40 million.

Volkswagen AG gained 2.6% to €108.85 after the Germany-based passenger car maker reached settlement agreements to pay $14.7 billion related to half-million diesel vehicles emissions cases.

Under the settlement, Volkswagen agreed to make payments ranging from $5,100 to $10,000 to either repair the cars into compliance with the emissions laws or buy back or terminate the leases.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc