EUROPE MARKETS: European Stocks End Higher As Weak German Sentiment Reading Hurts Euro
20 März 2018 - 6:41PM
Dow Jones News
By Carla Mozee, MarketWatch
Euro slides below $1.23
European stocks ended higher on Tuesday, aided by a pullback for
the euro following a weak German business sentiment reading. As
well, a drop in the pound after a slowdown in British inflation
helped lift U.K. blue-chip stocks.
How markets are moving
The Stoxx Europe 600 index rose 0.5% to close at 375.57 after
losing as much as 0.2% intraday. 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).
The export-heavy DAX 30 in Germany rose 0.7% to 12,307.33, and
the U.K.'s FTSE 100 indexgained 0.3% at 7,061.27
(http://www.marketwatch.com/story/ftse-100-rises-off-15-month-low-ahead-of-inflation-data-2018-03-20).
France's CAC 40 index ended 0.6% higher at 5,252.43.
The euro fell to $1.2262 from $1.2336 late Monday in New
York.
The pound fell to $1.3992 from $1.4025.
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?
Stocks across the region seesawed during the early part of the
session, but returned to positive territory as the euro fell below
the $1.23. Euro strength can pressure shares of European exporters
as a stronger euro can reduce revenue and earnings made overseas by
such companies.
The euro's decline came after widely watched German sentiment
survey from think tank ZEW said its economic sentiment index fell
to 5.1 in March, its lowest since September 2016. It was also below
forecasts of a 13.1 reading, and down from 17.8 in February.
"Concerns over a U.S.-led global trade conflict have made the
experts more cautious in their prognoses. The strong euro is also
hampering the economic outlook for Germany, a nation reliant on
exports," said ZEW President Professor Achim Wambach in a
statement. "Combined with the experts' continued positive
assessment of the current situation, however, the outlook is still
largely positive."
A drop in the pound also provided support for U.K.-listed
multinational companies, with that move made after British
inflation in February slowed to 2.7% from 3% in January. That was
below the 2.8% rate expected in a FactSet consensus estimate.
The euro and the pound had risen Monday against the U.S. dollar
after the EU and the U.K. agreed on the broad terms of a two-year
Brexit transition period
(http://www.marketwatch.com/story/eu-agrees-on-two-year-brexit-transition-deal-2018-03-19),
but those moved weighed on regional equities.
Read:Cambridge Analytica caught on hidden camera pitching bribes
and sex workers
(http://www.marketwatch.com/story/cambridge-analytica-caught-on-hidden-camera-pitching-dirty-tricks-2018-03-19)
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
"The ZEW readings typically correlate strongly with the DAX
index. A measurable improvement in sentiment will probably only
arrive at the time of new record highs for the DAX. Something that
does not look on the cards for now," said Jasper Lawler, head of
research at London Capital Group, in a note.
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
John Wood Group PLC shares (WG.LN) fell 6.8% as the energy
services company swung to a 2017 pretax loss of $21.6 million
(http://www.marketwatch.com/story/john-wood-group-swings-to-pretax-loss-2018-03-20)
after completing its buyout of engineering company Amec Foster
Wheeler.
Deutsche Boerse AG shares (DB1.XE) gained 2.4% to EUR111.05
after HSBC raised its price target on the exchange operator to
EUR123 a share from EUR114 a share.
A.P. Moeller-Maersk A/S shares (MAERSK-B.KO) declined 1.6% after
the Danish shipping company said Chief Finance, Strategy and
Transformation Officer Jakob Stausholm will leave the company
(http://www.marketwatch.com/story/ap-moeller-maersk-finance-chief-to-leave-company-2018-03-20-64852852)
as of March 31. Maersk didn't disclose the reason for his
departure.
Bellway PLC (BWY.LN) gained 3.5% as the U.K. home builder said
it's on track to deliver record sales
(http://www.marketwatch.com/story/bellway-profit-rises-on-track-for-record-sales-2018-03-20)
for the full year and that pretax profit rose 17% for the first
half of fiscal 2018.
BHP Billiton PLC (BLT.LN) (BHP.AU)(BHP.AU) rose 1.4%, with
shares of the mining heavyweight upgraded to neutral from
underperform at Exane BNP Paribas, according to Dow Jones
Newswires.
Micro Focus shares (MCRO.LN) fell 1.9% adding to Monday's 46%
plunge that came following the software maker's announcement that
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 13:26 ET (17:26 GMT)
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