By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks finished higher Monday,
with investors beginning to bargain hunt after last week's selloff,
though worries about heightened tension between Ukraine and Russia
kept the market's benchmark index in the red for much of the
session.
The Stoxx Europe 600 index closed up 0.3% to 329.79, swinging to
sustained gains after U.S. stocks opened higher following quarterly
results from financial services firm Citigroup Inc. (C) and a U.S.
March retail-sales report that each came in stronger than
anticipated.
The Stoxx 600 last week dropped 3.1%, the first such decline
since the week ended March 14. Stocks worldwide have recently been
under pressure, largely stemming from valuation concerns in
so-called momentum shares on Wall Street.
Mining shares in Europe moved up in European trading, guided
higher as concerns about an intensifying conflict between Ukraine
and Russia lifted metals prices, including those for gold which
rose more than $8 an ounce. Randgold Resources Ltd. topped the
group with its climb of 3.6%, and platinum producer Lonmin PLC rose
3.1%.
But stocks sagged throughout much of the session as pro-Russian
activists in eastern Ukraine ignored a Kiev-issued deadline to
disarm or face military force. Ukrainian forces were mobilized to
move east, The Wall Street Journal reported, in an effort to keep
Russia from extending its reach into the country. Ukraine's Interim
President Oleksandr Turchynov, however, said he wasn't opposed to
the activists' call for a nationwide referendum on regional
autonomy. The European Union and the U.S. have threatened to issue
more sanctions on Russia.
Russian stocks as tracked by the blue-chips MICEX index pulled
back 1.3% to 1,344.86, and the RTS benchmark lost 2% to end at
1,179.97.
In country-specific indexes, Germany's DAX 30 reversed course
and closed up 0.3% at 9,339.17, and France's CAC 40 ended higher by
0.4% at 4,384.56.
European stocks were slow to capitalize on signals the European
Central Bank is open to considering asset purchases to keep
long-term interest rates low. ECB executive board member Benoît
Coeuré said Sunday if further monetary accommodation is needed,
that "it is reasonable to consider other operations aimed at
lowering the term premium." Coeuré's comments followed ECB
President Mario Draghi's speech on Saturday, during which he warned
again that a further rise in the euro could lead to additional
monetary easing in a bid to keep inflation from falling too
low.
"The message coming out from the meeting was that a cut in
interest rates is likely at first, possibly into negative
territory. Only after that would the ECB attempt a
quantitative-easing program," said Marshall Gittler, head of global
currency strategy at IronFX, in a note Monday. The euro (EURUSD)
fell against the U.S. dollar on the prospect of further easing
measures.
In addition to inflation levels, the ECB is also watching
economic growth, which has been sluggish in parts of the euro zone.
Industrial production figures released by Eurostat on Monday showed
output rose by 0.2% in February from January, a slight increase
that met analyst expectations.
The U.K.'s FTSE 100 index rose 0.3% to 6,583.76, but Glencore
Xstrata PLC shares found support early in the session and finished
up 2% following the company's $5.8 billion sale of Peruvian copper
mine project to a Chinese consortium.
On the Stoxx 600, decliners included PSA Peugeot Citroën , down
6.3% after the French car maker outlined cost reductions and other
measures in an effort to return to profitability.
Also, GlaxoSmithKline PLC with shares off 0.6% after a BBC
"Panorama" report that the British drug maker is facing a criminal
investigation in Poland for allegedly bribing doctors to promote
the company's Seretide asthma medication. GSK said in a statement
that it disciplined an employee in 2011 over "inappropriate
communication" in its Polish program and that it continues to
investigate as it cooperates with Poland's anticorruption
bureau.
In other movers, Banca Popolare di Milano tumbled 8.5% after
shareholders over the weekend rejected the board's
governance-reform proposal.
Europe's equity-trading week will be shortened by the Good
Friday holiday.
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