By Carla Mozee, MarketWatch
Shares of home improvement retailer Kingfisher suffer
European stocks fell Wednesday, as investors prepared to hear
that the Federal Reserve likely has decided to continue raising
interest rates.
How markets are moving
The Stoxx Europe 600 index fell 0.2% to 374.68, as only the
utility sector moved higher. The consumer services group was
putting in the worst performance. On Tuesday, the index rose 0.5%
(http://www.marketwatch.com/story/european-stocks-turn-lower-as-tech-stocks-weigh-on-us-futures-2018-03-20).
Germany's DAX 30 fell 0.2% to 12,282.75 and France's CAC 40
index gave up 0.3% at 5,236.01.
The U.K.'s FTSE 100 index shed 0.3% at 7,040.83.
The euro bought $1.2277, up from $1.2241 late Wednesday in New
York. The pound traded at $1.4024, more than $1.3999.
Read:Germany's DAX forms 'death cross' chart pattern
(http://www.marketwatch.com/story/ach-du-meine-gute-germanys-dax-forms-death-cross-chart-pattern-2018-03-21)
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
The widely anticipated Fed policy decision for March is on deck
for global markets, and investors have priced in expectations that
it will raise its benchmark rate by a quarter-percentage point.
Investors are watching for hints the U.S. central bank may hike
rates four times this year, compared with three that have been
expected.
The Fed's monetary policy tends to drive financial markets
globally, as many companies do business in the world's largest
economy and it can lift borrowing rates for them. The decision is
due at 2 p.m. Eastern Time, or 6 p.m. London time. New Fed Chairman
Jerome Powell will hold his first post-announcement press
conference at 2:30 p.m. Eastern.
Check out:5 things to watch from the Fed decision
(http://www.marketwatch.com/story/5-things-to-watch-from-the-fed-decision-2018-03-19)
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)
The Bank of England's policy decision will follow on Thursday.
Ahead of that, U.K. data on Wednesday showed U.K. wage growth met
or exceeded forecasts
(http://www.marketwatch.com/story/uk-wage-growth-accelerates-in-january-2018-03-21)
in January. Investors were looking for a solid reading to help
prompt the Bank of England to raise interest rates in May, after
data on Tuesday showed inflation in February was lower than
expected.
Also on the radar Wednesday, European Union officials are
expected to unveil a proposal to tax revenue made by big tech
companies that operate in Europe. Reports indicate
(http://www.marketwatch.com/story/eu-may-impose-new-3-tax-on-tech-companies-revenues-report-2018-03-14)
the tax would be set at 3% and apply to companies with more than
100,000 users. That could affect companies including Facebook Inc.
(FB) and Alphabet Inc.'s Google (GOOGL) . The Stoxx 600 Technology
Index edged up 0.2% during Wednesday's trade.
What strategists are saying
"There is a small chance that we see a 50-basis-point rate hike
[by the Fed], but most analysts, me included, think this would be
an unnecessary shock for markets, despite the strong growth story
currently in the U.S.," said Axi Trader's chief market analyst
James Hughes in a note.
"In his prepared notes before his first appearance as Fed
chairman, [Jerome] Powell talked about a solid growth and robust
jobs market backdrop. This could back up the recent Fed dot chart
that shows a swing towards just 3 rate hikes this year instead of
the 4 that market is so obsessed with. All in all the focus ...
will be on which way Powell hints," said Hughes.
"Traders will now look to the Bank of England for some
much-needed clarity. Headwinds are starting to dissipate -- a
Brexit transition deal is in place, inflation from the devalued
pound is working its way out the system and wages, which can be a
stubborn beast, are proving to be resilient," wrote Fiona Cincotta,
City Index's senior market analyst.
The pound/dollar pair is trading higher, "finding resistance at
$1.4070 [and] a meaningful move above this level could see GBP/USD
target $1.41 in the near term," she added.
Stock movers
At the top of the Stoxx 600, Ubisoft Entertainment SA shares
(UBI.FR) rose 4.3% after French media conglomerate Vivendi sold its
stake in the video game publisher for EUR2 billion euros
(http://www.marketwatch.com/story/vivendi-to-sell-stake-in-ubisoft-for-2-billion-2018-03-21).
Vivendi (VIV.FR) shares were also higher, by 1.3%.
Kingfisher PLC shares (KGF.LN) sank 7.9% after the home
improvement retailer behind the Screwfix and B&Q stores posted
a 10% fall in fiscal 2018 pretax profit and said there's been a
mixed performance in key markets.
(http://www.marketwatch.com/story/kingfisher-2018-profit-falls-10-2018-03-21)
The U.K. is more uncertain, France is encouraging yet volatile,
whilst the market in Poland remains supportive," said Kingfisher
CEO Véronique Laury in a statement.
Hermes International SCA (RMS.FR) tacked on 3.8% as the French
luxury retailer posted an 11% rise in profit for 2017
(http://www.marketwatch.com/story/hermes-net-profit-rises-11-for-2017-2018-03-21)
on revenue growth across all its geographical markets. The maker of
Birkin bags also confirmed its "ambitious goal" for revenue growth
at constant exchange rates.
(END) Dow Jones Newswires
March 21, 2018 06:44 ET (10:44 GMT)
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