Europe cheers Brexit bank verdict, on tenterhooks over Ireland

Frankfurt (Nov 28)  European shares opened slightly higher on Tuesday as the Bank of England deemed that UK lenders could deal with a "disorderly" Brexit, while the dollar held steady ahead of a confirmation hearing for Federal Reserve chair nominee Jerome Powell.

The FTSEurofirst 300 index of top European shares was up 0.3 percent, supported by financials, although a stumble in Chinese stocks for a second straight session kept the MSCI All-Country World index flat.

European stocks were also buoyed by gains in Royal Dutch Shell after the oil major cancelled an austerity dividend, while online grocer Ocado jumped following a deal with French supermarket Casino . The BoE said none of Britain's major lenders would need to raise extra capital if the country crashed out of the European Union, the first time it had come to such a conclusion since it started stress-testing banks in 2014. But the chances of a hard Brexit were increased by the prospect of a snap election in Ireland which could be called as early as Tuesday, and which would complicate a key Brexit summit next month. Euro zone government bond yields were pinned to recent lows as the Irish government teetered, with 10-year German yields - the regional benchmark - dropping to 0.33, barely 2 basis points of the November lows. "If we have snap elections and then if a Brexit deal is in jeopardy then it will have a major impact," said DZ Bank analyst Sebastian Fellechner. "It could lead to a risk-off environment and be a disruptive factor in this very calm market."

Reuters