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Europe stocks shrug off Unilever as pound rallies

London - European stocks advanced as gains in telecommunications shares helped to offset a slump in Unilever. The pound recouped most of Friday’s losses ahead of a House of Lords Brexit debate.

Equities in the world’s biggest single market rose and US futures pointed higher even as Unilever slumped after Kraft Heinz Company withdrew a $143bn takeover bid.

The pound rallied the most in more than two weeks against the dollar, while South Africa’s rand fell on political turmoil. Oil advanced for a third day and spot gold rose for the fourth session in five.

With US bond and stock markets shut on Monday for Presidents’ Day, investors are watching developments in Europe.

Political risk is in focus after a poll showed public approval for German Chancellor Angela Merkel’s ruling party fell behind the Social Democrats for the first time under her leadership.

And in the UK, some members of the parliament’s upper chamber will seek changes to the draft law that will allow the government to trigger a departure from the EU when it is discussed by the Lords on Monday.

Trading in Kraft and its erstwhile target remains in focus on the back of Friday’s surge in both stocks. People familiar with the talks at the weekend said 3G Capital and Warren Buffett’s Berkshire Hathaway decided Unilever’s negative response made a friendly transaction impossible.

Here’s what’s ahead for markets:

The Fed releases minutes this week from its most recent meeting, possibly giving investors a look into how members see Trump’s policies. Data should show the US housing market perking up a bit at the start of the year.

The PMI is expected to rise slightly.

PMI surveys for the euro area and its two largest economies this week may show growth momentum is solid, while the Ifo business confidence survey may support that view for Germany.

Investors will be watching International Petroleum Week in London with top Opec, government and company officials attending.

Among companies reporting earnings this week are Wal-Mart Stores, Barclays and HSBC Holdings. Billionaire Warren Buffett will release his annual letter to shareholders with Berkshire Hathaway’s earnings.

The UK’s House of Lords will debate the article 50 bill, the legislation which will allow Theresa May to trigger Brexit.

Bank of England Governor Mark Carney will on Tuesday testify before the UK Parliament’s Treasury Committee.

Here are the main moves in markets:

Stocks

Stoxx Europe 600 Index rose 0.3% as of 9:29 in London, with banks bouncing after Friday’s selloff. Telecom companies outperformed, led by Deutsche Telekom following a rally in T-Mobile shares on Friday.

Shares in Unilever fell 6.3%; stock remains above level from before Kraft offer was revealed last week.

Currencies

The Bloomberg Dollar Spot Index swung between gains and losses to trade little changed Monday while US holiday weighed on volumes.  

Sterling was higher versus all its Group-of-10 peers; it led gains versus the greenback as it rose 0.5% to $1.2479, while it was up 0.9% versus the yen at 141.238

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