By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) -- Concerns over global economic growth
and a continuing political impasse surrounding the U.S. budget left
European shares struggling for direction Wednesday.
The Stoxx 600 Europe index erased a small decline to finish at
286.03, eking out a gain of 0.06 point, or less than 0.1%. The
benchmark posted a marginal decline Tuesday after beginning the
week with a 0.4% retreat on Monday.
"There's no conviction one way or the other," said Keith Bowman,
equity analyst at Hargreaves Lansdown in London.
Lingering questions about the outlook for global growth and,
closer to home, the euro zone's ability to recover from recession
helped cap upside for European shares after a strong run into the
new year.
In Paris, the CAC-40 stock index rose 0.3% to 3,708.49, while
Germany's DAX 30 index gained 0.2% to 7,691.13. London's FTSE 100
lost 0.2% to close at 6,103.98.
Drug makers were the biggest contributors to the upside, with
Sanofi SA rising 0.5% in Paris. Novartis AG gained 0.7% in
Switzerland, while Novo Nordisk A/S added 1% in Copenhagen.
Shares of TUI AG rose 8.8% in Frankfurt. London-listed TUI
Travel PLC said it had received an approach from TUI AG that "may
or may not result in a combination of the two companies."
TUI Travel PLC rose 3.9%.
Reflecting weakness across much of the mining sector in London,
shares of Anglo American PLC slumped 3.1%. Analysts at Société
Générale cut its rating to sell from hold, saying that a
restructuring planed by incoming Chief Executive Mark Cutifani may
not herald as radical a reshuffle as initially anticipated.
Lonmin PLC was the biggest percentage decliner on the Stoxx 600,
chalking up a 5.9% loss in London, while Xstrata PLC dropped
3.4%
European shares got off to a weak start, tracking a weaker tone
in Asia after the World Bank on Tuesday cut its forecast for global
growth.
The World Bank said it now expects growth of just 2.4% in 2013,
barely stronger than the 2.3% rate seen in 2012 and down from an
earlier estimate in June of 3%.
'Currency wars'
Also, Luxembourg Prime Minister Jean-Claude Juncker was quoted
late Tuesday as saying that the euro is "dangerously high."
The remarks by Juncker, who chairs meetings of euro-zone finance
ministers, sent the shared currency lower, while highlighting
concerns about growth prospects for the region and continuing
global currency tensions.
"Add the usual interventionist policies of emerging markets, and
suddenly currency wars become a proposition which should not be
dismissed so easily," said Geoffrey Yu, strategist at UBS.
Meanwhile, worries over the U.S. budget impasse are also casting
a shadow over global markets, said Bowman at Hargreaves
Lansdown.
"Any move with regard [to the debt ceiling] would appear to give
markets direction one way or the other," he said.
A round of earnings results from major U.S. banks failed to
provide much spark, he noted.
While shares of Goldman Sachs Group Inc. (GS) gained ground on
Wall Street after upbeat earnings, other banks including J.P.
Morgan Chase & Co. (JPM) lost ground despite seemingly solid
results.
Wall Street saw U.S. stocks trade mixed. .
Some European banks also came under pressure, with Société
Générale SA trading down 2.8% in Paris and Lloyds Banking Group PLC
dropping 2.5% in London.
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