EUROPE MARKETS: European Stocks Drop For Second Day As Euro Rises After Inflation Data
28 April 2017 - 12:50PM
Dow Jones News
By Sara Sjolin and Carla Mozee, MarketWatch
UBS jumps after earnings
European stocks posted mild losses Friday, with investors
pushing up both the euro and the pound against the dollar following
top-tier economic data for the eurozone and the U.K., but remained
on track to finish April trade with gains.
The Stoxx Europe 600 index fell 0.2% to 386.98, set for second
straight day in negative territory. The benchmark on Thursday broke
a six-session win streak
(http://www.marketwatch.com/story/european-stocks-snap-winning-streak-with-ebc-on-deck-2017-04-27)
after the European Central Bank offered no surprises at its policy
meeting, while a drop for Deutsche Bank AG (DBK.XE) (DBK.XE) also
weighed.
Most European stock markets are closed for trade on Monday for
May Day and the U.K.'s early May bank holiday. Only the Danish
market is open for trade, according to index provider Stoxx
(https://www.stoxx.com/document/Resources/Methodology/Dissemination/Realtime_Data/dissemination_calendar_2017.pdf).
Euro, pound advance: The euro was pushed to $1.0949 after the
preliminary eurozone inflation report for April, with investors
eyeing the prospect that stronger inflation may compel the European
Central Bank to raise interest rates. The shared currency bought
$1.0874 late Thursday in New York.
Core inflation excluding energy and food rose to 1.2% in April,
according to Eurostat. That's the highest since March 2013, FactSet
data showed, and surpassed the consensus estimate of 1%. Headline
inflation rose to 1.9%, above the 1.8% estimate.
ECB President Mario Draghi in his press conference on Thursday
said there was still no "convincing upward trend" in underlying
inflation in the eurozone, reiterating that it's too soon to scale
back the bank's aggressive stimulus program.
Read:ECB live blog recap: Mario Draghi sees diminished downside
economic risks
(http://blogs.marketwatch.com/thetell/2017/04/27/ecb-live-blog-mario-draghi-expected-to-avoid-taper-talk/)
Also after the inflation data, the yield on the 10-year German
bund climbed 5 basis points to 0.35% as prices fell. Rising
inflation eats into the value of interest payments.
Meanwhile, the pound bought $1.2943, remaining above $1.29 even
after British economic growth slowed more than expected in the
first quarter. A preliminary reading of 0.3% growth was less than
the FactSet estimate 0.4%, as services-sector activity slowed
considerably.
Shares of multinational companies can be hurt by strengthening
in the euro and the pound as they would hurt prospect for higher
sales and earnings made overseas.
The U.K.'s FTSE 100 index was down 0.3% to 7,216.79
(http://www.marketwatch.com/story/ftse-100-falls-as-barclays-drops-pound-rises-ahead-of-gdp-data-2017-04-28).
French inflation data out earlier on Friday came in at 1.4%
(http://www.marketwatch.com/story/french-inflation-rises-01-misses-expectations-2017-04-28),
in line with forecasts.
In other economic news, German retail sales rose 0.1% in March
(http://www.marketwatch.com/story/german-retail-sales-nudge-higher-in-march-2017-04-28)on
the month, beating forecasts of a flat reading.
France's CAC 40 index rose 0.2% to 5,280.24. Germany's DAX 30
index was up 0.1% at 12,450.85.
Weekly win: The pan-European benchmark was set for a 2.4% weekly
gain following a strong rally at the start of week after centrist
Emmanuel Macron came out on top in the first round of the French
presidential election. Macron is expected to win the runoff round
against far-right Marine Le Pen on May 7, easing fears of a
so-called Frexit.
For April, the benchmark was on track for a 1.6% rise.
Movers: Shares of UBS Group AG (UBS) jumped 3.1% after the Swiss
banking giant reported earnings well ahead of forecasts
(http://www.marketwatch.com/story/ubs-beats-forecasts-as-income-growth-strong-2017-04-28)due
to strong income growth in its investment-banking and
wealth-management units.
On a more downbeat note in the banking space, shares of Barclays
PLC (BCS) (BCS) slid 4.8% after the U.K. lender said its net profit
fell by more than half in the first quarter of the year.
(http://www.marketwatch.com/story/barclays-profit-slides-on-write-down-shares-fall-2017-04-28)
Electrolux AB shares (ELUXY) jumped 4.9% after the Swedish
household-appliance maker posted better-than-expected earnings of
1.08 billion Swedish kronor
(http://www.marketwatch.com/story/electrolux-shares-leap-after-earnings-beat-views-2017-04-28)($122.3
million) for the first quarter on improving trend across all of its
businesses while accelerating cost savings.
Outside of earnings reports, France's Thales SA (HO.FR) said it
is acquiring Guavus
(http://www.marketwatch.com/story/thales-to-buy-us-data-analysis-firm-guavus-2017-04-28),
and will pay as much as $215 million for the California-based
big-data analysis firm.
(END) Dow Jones Newswires
April 28, 2017 06:35 ET (10:35 GMT)
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