EUROPE MARKETS: European Stocks Pull Lower After Trump's Speech
January 23 2017 - 5:29AM
Dow Jones News
By Carla Mozee, MarketWatch
Citi raises year-end target for Stoxx 600
European stocks dropped Monday, as equity investors got their
first chance to react to U.S. President's Donald Trump's
inauguration speech, seen as taking a protectionist tone.
The Stoxx Europe 600 fell 0.6% to 360.33. The index on Friday
closed lower by 0.1% ahead of Trump's speech in Washington D.C. The
pan-European benchmark also finished last week with a 0.9% decline,
the first weekly fall in four.
At the same time, the euro rose against the U.S. dollar. It was
buying $1.0730, up from $1.0703 late Friday in New York. A weaker
euro is more favorable for European exporters. The U.S. dollar
overall was continuing to slide against major rivals Monday.
"U.S. dollar bulls were not really impressed of the new
presidents' inauguration speech, as it was focused more on
protectionism and lacked concrete plans to drive growth," said
Hussein Sayed, chief market strategist at FXTM, in a note.
"Repealing Obamacare, building a Mexican border wall, and
withdrawing from the Trans Pacific Partnership was not the kind of
news investors wanted to hear; they needed to know when pro-growth
fiscal policies will come into play and more importantly whether
Congress will approve them," Sayed said.
On major European indexes, Germany's DAX 30 gave up 0.9% to
11,531.46 and France's CAC 40 fell 0.8% to 4,809.60.
"Trump's first 100 days will now be the key focus, and while he
may be given a short honeymoon period by the market, patience will
run out quickly if there is little progress towards making good on
his promises of tax cuts, stimulus and deregulation," wrote James
Woods, global investment analyst at Rivkin Securities.
Meanwhile, European portfolio strategists at Citigroup on Monday
raised their 2017 year-end target for the Stoxx 600 to 410, from a
previous year-end forecast of 380. They were upbeat on economic
growth and the potential for companies' earnings-per-share
performance. "GDP and EPS growth appear to be on improving trends,"
they said.
Movers: Assicurazioni Generali SpA (G.MI) climbed 5.2%, topping
the Stoxx 600 following a report by Italian newspaper La Stampa
that Allianz SE (ALV.XE) is considering a bid for the insurer.
Paddy Power Betfair PLC (PPB.DB) shares fell 1.3% as the betting
firm said its 2016 earnings should come in around the mid-point of
its guidance
(http://www.marketwatch.com/story/paddy-power-betfair-sees-2016-earnings-at-midpoint-2017-01-23)
of GBP390 million ($479 million) to GBP405 million.
Essentra PLC (ESNT.LN) shares were 5% lower after the plastics
components supplier said adjusted operating profit for 2016 will be
around the bottom end of its previous guidance
(http://www.marketwatch.com/story/essentra-sees-adj-profit-at-bottom-of-guidance-2017-01-23).
Other indexes: U.K's FTSE 100 fell 0.9% to 7,137.79, and Spain's
IBEX 35 lost 0.8% to 9.302.20.
Over the weekend, former French prime minister Manuel Valls and
former education minister Benoit Hamon qualified to run in the
second stage of the French Socialist Party's presidential primary.
Hamon, 49, came in ahead of Valls in voting that took place
Sunday.
(END) Dow Jones Newswires
January 23, 2017 05:14 ET (10:14 GMT)
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