EUROPE MARKETS: European Stocks Snap Winning Streak, With EBC On Deck
27 April 2017 - 10:48AM
Dow Jones News
By Carla Mozee, MarketWatch
Deutsche Bank shares fall despite doubling in profit
European stocks fell Thursday for the first time in seven
sessions, with Deutsche Bank AG shares falling despite a leap in
profit, as investors waited for a policy update from the European
Central Bank.
The Stoxx Europe 600 fell 0.4% to 387.26. No sector traded
higher, with oil and gas, consumer goods and utility shares logging
the biggest losses. The index on Wednesday
(http://www.marketwatch.com/story/european-stocks-struggle-to-hold-onto-20-month-high-ahead-of-trump-tax-unveiling-2017-04-26)
rose 0.5%, ending at the highest level since August 2015.
The march of earnings reports continued Thursday. Deutsche Bank
(DBK.XE) (DBK.XE) shares dropped 3% after the German lending
heavyweight's profit doubled in the first quarter, but revenue came
in roughly flat
(http://www.marketwatch.com/story/deutsche-bank-profit-more-than-doubles-2017-04-27-24851353)
when adjusted for the impact of credit spreads.
European stocks were lower following the unveiling of U.S.
President Donald Trump's plan for tax cuts and changes
(http://www.marketwatch.com/story/markets-got-what-was-broadly-expected-from-tax-plan-a-starting-point-2017-04-26),
with some analysts saying the outline lacked detail. U.S. stocks
shifted lower after the tax announcement.
Opinion:Trump's tax plan sets the stage for Dow 30,000, says
Nigam Arora
(http://www.marketwatch.com/story/trumps-tax-plan-sets-the-stage-for-dow-30000-2017-04-26)
ECB meeting: The European Central Bank is set to release its
monetary policy statement, including any changes to interest rates
and quantitative easing, later Thursday.
The central bank isn't expected to make major policy changes
ahead of the final round of voting in the French presidential
election, set for May 7. In addition, ECB President Mario Draghi
has said there's yet to be evidence of a durable rise in eurozone
inflation.
"Overall, we expect Draghi to remain restrained in this meeting,
after all, the risks to inflation -- CPI dipped in March -- are
still tilted to the downside and this could be one reason to delay
tapering," said Kathleen Brooks, research director at City Index,
in a note.
Read: French election relief lays ground for ECB tapering -- but
not yet
(http://www.marketwatch.com/story/french-election-relief-could-pave-way-for-ecb-tapering-but-not-yet-2017-04-25)
Troubles in the Italian banking sector may be another reason the
ECB will hold off tapering, said Brooks.
"If the ECB reduces the amount of liquidity in the European
financial system too quickly then it is hard to see how these banks
can recapitalize themselves, and avoid selling off some of their
bad debts at a book value so low that it hits their capital
position," she said.
Ahead of the ECB statement, the euro bought $1.0906, on par with
late Wednesday in New York. The bank's policy statement is due at
1:45 p.m. Frankfurt time, or 7:45 a.m. Eastern Time, followed by a
news conference with Draghi at 2:30 p.m. Frankfurt time.
Stock movers: Deutsche Lufthansa AG (LHA.XE) shares were down
1.7% after the airline group swung to a first-quarter operating
profit
(http://www.marketwatch.com/story/lufthansa-swings-to-profit-as-sales-jump-2017-04-27)
of 25 million euros ($27.3 million). The airline group earlier this
month said ticket pricing was more positive on a currency adjusted
basis.
Bayer AG (BAYN.XE) shares were up 3.1% after the German
pharmaceuticals and chemicals maker reported a 38% jump in net
profit
(http://www.marketwatch.com/story/bayer-profit-up-38-on-plastics-lifts-outlook-2017-04-27)
for the first quarter and raised its outlook for the full year.
WPP PLC shares (WPP.LN) fell 1.9% after the world's largest
advertising company said revenue growth slowed in the first quarter
as clients spent less in the U.S. and emerging markets
(http://www.marketwatch.com/story/wpp-revenue-growth-lags-as-us-clients-spend-less-2017-04-27).
Individual indexes: Germany's DAX 30 fell 0.3% to 12,433.22.
France's CAC 40 lost 0.4% at 5,266.59,
The U.K.'s FTSE 100 gave up 0.5% to 7,241.44.
(END) Dow Jones Newswires
April 27, 2017 04:33 ET (08:33 GMT)
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