Europe Stocks Edge Down on Earnings -- Update
May 11 2017 - 5:43AM
Dow Jones News
By Riva Gold and Kenan Machado
Stocks were off to a quiet start Thursday as investors parsed
mixed corporate results ahead of a Bank of England meeting.
The Stoxx Europe 600 edged down 0.2% in morning trading from its
highest close since 2015, echoing a muted session on Wall
Street.
The telecom and utilities sectors led declines in Europe, with
shares of Spanish telecommunications giant Telefónica and the
U.K.'s BT Group PLC trading lower after releasing earnings
figures.
Among gainers, shares of UniCredit SpA were up 4.2% after the
Italian lender posted a first-quarter net profit, while miners and
oil and gas companies outperformed as oil and metals prices
recovered.
Later Thursday, the Bank of England is expected to leave its
rates unchanged ahead of a U.K. national election in June. The
BOE's inflation report, vote, and comments will be closely watched
by investors, however, for any hints at a change in its projections
for growth and inflation.
"The key focus will be on whether it will keep a possible early
rate rise on the table," said strategists at Nordea.
The British pound was last down 0.2% $1.2919 following
disappointing industrial production figures, after climbing 4.6%
against the dollar this year.
In the U.S., futures suggested the S&P 500 would pull back
0.1% from a record high, following a raft of earnings reports.
Shares of Snap Inc. tumbled 23% in after-hours trading Wednesday
after its first quarterly report as a public company showed it
struggled to maintain user growth. Shares of technology companies
had led gains in U.S. stocks so far this year by a wide margin.
"This is a very narrow rally," said Brad McMillan, chief
investment officer at Commonwealth Financial Network. "People are
really willing to pay up for growth, and tech is one of the few
areas where that's actually happening."
Shares of Whole Foods Market, Inc. climbed in premarket trading,
after the grocery chain said it would dramatically reshape its
board.
Earlier, stocks were broadly higher in Asian trading hours, in
part supported by a climb in oil and metals prices. Crude prices
logged their biggest daily gains since December on Wednesday, and
Brent crude oil added another 1.1% to $50.77 a barrel on Thursday.
Copper futures were last up 1.7% at $5,606 a ton.
Japan's Nikkei Stock Average rose 0.3%, while Hong Kong's Hang
Seng Index added 0.4% and Australia's S&P/ASX 200 added 0.1%
despite weakness among shares of lenders.
South Korea's Kospi was on track for a fresh record as stocks
rebounded from Wednesday's postelection pullback.
"Investment sentiment for the Korean stock market is expected to
remain positive for the coming months, backed by sound corporate
earnings," said John Park, chief investment officer of Baring Asset
Management Korea. "The market may continue to rally significantly
if retail investors return to the market."
In China, a note was posted on an official WeChat account run by
the state-owned Securities Times, saying the country's stock
regulator summoned brokers with large capital pools for a meeting
on Monday to ease concerns about a crackdown in the shadow-banking
sector. The regulator clarified that the crackdown is targeted at
nonstandard assets and doesn't include bonds.
The Shanghai Composite rose 0.3%, recovering from earlier losses
that sent it to a seven-month low.
In currencies, the New Zealand dollar fell sharply against the
greenback after a central-bank policy statement was interpreted as
dovish.
The euro was up 0.1% at $1.0882 even after the European Central
Bank's chief economist said withdrawing monetary stimulus too soon
would be riskier than doing so too late.
"Scaling back too early could jeopardize the recovery and the
convergence of inflation toward our objective," said Peter
Praet.
The WSJ Dollar Index, which tracks the dollar against a basket
of 16 currencies, was otherwise flat.
Yifan Xie
, Noemie Bisserbe, Georgia Wells, Tom Fairless and P.R. Venkat
contributed to this article.
Write to Riva Gold at riva.gold@wsj.com and Kenan Machado at
kenan.machado@wsj.com
(END) Dow Jones Newswires
May 11, 2017 05:28 ET (09:28 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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