UKX FTSE 100 Index

By Carla Mozee, MarketWatch

German inflation rises to highest since 2013

European stocks searched for firm direction Wednesday, as investors sifted through corporate updates, including better-than-anticipated results from ASML Holding NV.

The Stoxx Europe 600 was down less than 1 point at 362.28, drifting back from a modest gain of 0.3%. Sectors losing ground included consumer services, financials and industrials, while technology, consumer goods and health care shares moved higher.

The pan-European benchmark on Tuesday closed down by 0.2% (http://www.marketwatch.com/story/european-stocks-sag-as-uk-sets-sights-on-exiting-eus-single-market-2017-01-17), but came off session lows after U.K.'s Prime Minister Theresa May said British lawmakers will be able to vote on terms of a final Brexit deal negotiated between U.K. and European Union officials. Britain will leave the bloc's single market, she said in a speech Tuesday in London, (http://www.marketwatch.com/story/uk-leader-theresa-mays-plan-for-brexit-text-of-her-speech-in-full-2017-01-17)or make a so-called hard Brexit.

"Taken together this should help alleviate some of the harder Brexit concerns that overall sends a positive signal to reassure U.K. business and investors," said James Woods, global investment analyst at Rivkin Securities, in a note. "However a healthy skepticism remains, given free trade agreements typically take more than two years the negotiate, that's if the U.K. is able to reach such an agreement with the EU."

Read: Why Theresa May is right to take a huge gamble on hard Brexit (http://www.marketwatch.com/story/why-theresa-may-is-right-to-take-a-huge-gamble-on-hard-brexit-2017-01-17)

(http://www.marketwatch.com/story/uk-leader-theresa-mays-plan-for-brexit-text-of-her-speech-in-full-2017-01-17)And:May offers escape hatch to U.K. banks, car makers in Brexit speech (http://www.marketwatch.com/story/uks-may-offers-escape-hatch-to-banks-car-makers-in-brexit-plan-speech-2017-01-17)

Among major indexes, Germany's DAX 30 moved up 0.2% to 11,561.28 on Wednesday and the U.K's FTSE 100 (http://www.marketwatch.com/story/ftse-100-in-recovery-mode-after-worst-selloff-in-six-months-2017-01-18) edged up 0.1% to 7,229.57. The London index on Tuesday slid 1.5% (http://www.marketwatch.com/story/ftse-100-slips-as-may-signals-britain-will-leave-eus-single-market-2017-01-17), its worst performance since June 27, according to FactSet data.

U.K. blue-chips sold off Tuesday as the pound soared nearly 3%, posting its biggest one-day gain since December 2008. On Wednesday, sterling was buying $1.2311, down from $1.2378 late Tuesday.

Movers: Pearson PLC shares (PSON.LN) plunged 24% after the publisher of educational materials warned of lower future dividends (http://www.marketwatch.com/story/pearson-warns-on-profit-as-us-demand-slackens-2017-01-18) and profit, citing a slide in U.S. demand.

ASML Holding NV shares (ASML.AE) climbed 4.6% after the Dutch chip-equipment maker's quarterly profit and earnings forecast came in above expectations.

Gerresheimer AG shares (GXI.XE) popped up 6.4% after Deutsche Bank upgraded the German drugs packaging firm to a buy rating from hold.

Novozymes A/S (NZYM-B.KO) rose 2.4% after the world's largest maker of enzymes projected 2017 sales and profit growth and said it plans a share buy back up to 2 billion kroner. The company also plans to cut 198 jobs.

Deutsche Bank AG (DBK.XE) (DBK.XE) was down 0.2%. The U.S. Department of Justice on Tuesday finalized its settlement with Germany's largest lender (http://www.marketwatch.com/story/justice-dept-finalizes-72-billion-settlement-with-deutsche-bank-2017-01-17) over allegations the bank misled about residential mortgage-backed securities between 2006 and 2007. The bank will pay $3.1 billion and provide $4.1 billion in relief to underwater homeowners and others.

Other indexes: France's CAC 40 was down 0.5% at 4,834.65 and Spain's IBEX 35 was fractionally higher at 9,395.40.

The euro changed hands at $1.0694, down from $1.07504 late Tuesday.

Economic data and other developments: Inflation in Germany was confirmed to have increased to 1.7% in December, (http://www.marketwatch.com/story/german-inflation-hits-highest-level-since-2013-2017-01-18) the highest annual rate since July 2013, led by rising prices for fuel and heating oil, Destatis said Wednesday.

Eurozone inflation for December was confirmed at 1.1%.

The European Commission has asked Italy to reduce its 2017 budget deficit (http://www.marketwatch.com/story/eu-asks-italy-to-cut-its-budget-deficit-2017-01-18) by about EUR3.4 billon ($3.64 billion) to avoid an excessive-deficit procedure that could include fines.

(END) Dow Jones Newswires

January 18, 2017 05:26 ET (10:26 GMT)

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