EUROPE MARKETS: European Stocks Turn Lower As Tech Stocks Weigh On U.S. Futures
20 März 2018 - 11:38AM
Dow Jones News
By Carla Mozee, MarketWatch
European stocks slipped Tuesday, with investors appearing to
hesitate after a tech-led selloff hurt the regional market in the
prior session, and as financial markets prepare for a possible
interest-rate hike by the Federal Reserve.
How markets are moving
The Stoxx Europe 600 index was off 0.1% at 373.45, backing off a
rise of 0.3% earlier in the session. Only the basic materials and
financial sectors held to higher ground while utility and telecom
shares fared the worst. On Monday, the index slumped 1.1%
(http://www.marketwatch.com/story/european-stocks-build-on-losses-as-micro-focus-shares-plunge-2018-03-19)
and ended at its lowest since March 7, according to FactSet
data.
Germany's DAX 30 turned lower and lost 0.1% at 12,204.71, and
France's CAC 40 index gave up 0.2% to 5,212.92. The U.K.'s FTSE 100
index , meanwhile, was up 0.2% at 7,054.75. Spain's IBEX 35 fell
0.4% to 9,621.90.
The euro bought $1.2327, slightly lower than $1.2336 late Monday
in New York. Against the pound, the shared currency was down
roughly 0.2% at 0.8782 pound.
The pound jumped above $1.40
(http://www.marketwatch.com/story/pound-roars-back-above-140-after-eu-agrees-to-brexit-transition-deal-2018-03-19)
and was recently at $1.4042 after the European Union agreed on the
broad terms of a two-year transition period
(http://www.marketwatch.com/story/eu-agrees-on-two-year-brexit-transition-deal-2018-03-19)
for the U.K. when Brexit kicks in next year.
Check out:Pound could surge in 'frenetic' week of Brexit and BOE
news, ING says
(http://www.marketwatch.com/story/pound-could-surge-in-frenetic-week-of-brexit-and-boe-news-ing-says-2018-03-16)
What's driving markets
European stocks appeared largely to take their cue from U.S.
stock futures , which began to drift lower, indicating Wall Street
is setting up for another drop. Shares of Facebook (FB) and Oracle
(ORCL) were down ahead of Tuesday's open after a slide in tech
stocks . That led a selloff in the U.S. market on Monday that bled
into European stocks.
Facebook Inc. (FB) , which is coming under official scrutiny
over its use of member data.
Meanwhile, investors may be reluctant to take on significant
risk before the Federal Reserve releases its policy decision on
Wednesday, with markets pricing in a hike in rates by the central
bank. The Fed will begin meeting on Tuesday.
Investors worldwide watch Fed rate policy, as higher U.S.
interest rates can make riskier assets such as stocks less
attractive -- and because many companies do business in the word's
largest economy. Also this week, the Bank of England is expected to
hint at a rate rise when its policy decision is released
Thursday.
The euro and the pound retained much of their gains made Monday
against the U.S. dollar after the EU and the U.K. agreed on the
broad terms of a Brexit transition deal.
Read:Trump's most market-rattling trade blasts are still to
come, warns Pimco
(http://www.marketwatch.com/story/trumps-most-market-rattling-trade-blasts-are-still-to-come-warns-pimco-2018-03-16)
What strategists are saying
"Investors should not only be worried about the drop in Facebook
equities, but also about FAANG stocks, which have been leading the
bull market for many years," said Hussein Sayed, chief market
strategist at FXTM, in a note. "Concerns that the European
Commission will impose new taxes on tech firms in retaliation for
U.S. steel and aluminum tariffs is an early indication that the
trade war should be taken more seriously. If markets decided to
turn on FAANG stocks, we would likely see a similar reaction to
last February's correction," he said.
Don't miss: What to expect from the new Fed dot plot on interest
rates
(http://www.marketwatch.com/story/what-to-expect-from-the-new-fed-dot-plot-on-interest-rates-2018-03-16)
And read:It's time for stock-market investors to refocus on the
Fed
(http://www.marketwatch.com/story/now-its-time-for-the-stock-market-to-refocus-on-the-fed-2018-03-16)
Stock movers
Micro Focus shares (MCRO.LN) rose 3.2%, topping the Stoxx 600.
The shares on Monday sank 46% for the software maker said CEO Chris
Hsu has resigned
(http://www.marketwatch.com/story/micro-focus-shares-slump-on-ceo-exit-revenue-warning-2018-03-19)
and warned that revenue for fiscal 2018 will fall more than
previously anticipated.
(END) Dow Jones Newswires
March 20, 2018 06:23 ET (10:23 GMT)
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