EUROPE MARKETS: Euro Leaps After Draghi Speaks, Pulling European Stocks Toward 2-week Low
June 27 2017 - 6:01AM
Dow Jones News
By Carla Mozee, MarketWatch
Doubts grow over Deutsche Telekom-Sprint deal
European stocks dropped Tuesday, feeling the weight of a rising
euro, as profit warnings and merger concerns pulled regional
equities toward their lowest level in nearly two weeks.
The Stoxx Europe 600 fell 0.6% to 386.65, on track for its
lowest close since June 15, FactSet data showed. Only the basic
materials and oil and gas sectors moved higher. Decliners were led
by telecom and technology stocks.
The pan-European index lost as much as 0.9% as the euro jumped
above $1.1250, its highest level in nearly two weeks. The shared
currency gained after European Central Bank President Mario Draghi
said in a speech in Portugal that "a considerable degree" of
stimulus is needed in the eurozone, a step back from the stimulus
levels signaled in earlier speeches.
"Mr. Draghi continues to argue that his policies are behind the
overall improvement in eurozone economies, but it was his shift of
emphasis from 'very substantial' to 'considerable' where stimulus
was concerned that really got everyone talking," wrote Chris
Beauchamp, IG's chief market analyst.
A stronger euro can hurt shares of European exporters as it can
make their products more expensive for clients overseas to
purchase.
In Frankfurt, the export-heavy DAX 30 was down 0.6% at
12,699.19.
Carney, Yellen to speak: Central bankers are in focus Tuesday,
with Bank of England Governor Mark Carney set to speak about the
bank's Financial Stability Report at 6 a.m. Eastern Time. In
London, Federal Reserve Chairwoman Janet Yellen will speak at 1
p.m. Eastern time.
In London, the FTSE 100 declined 0.3% to 7,424.97. France's CAC
40 index slumped 0.6% to 5,262.72.
Germany's DAX 30 gave up 0.7% to 12,685.33.
Stock movers: Stada Arzneimittel AG (SAZ.XE) slid 4.9% after
German drug maker said a takeover plan by financial investors Bain
Capital and Cinven had fallen through. Shareholders didn't tender
enough of the shares required for the offer to go through
(http://www.marketwatch.com/story/stada-takeover-by-baincinven-fails-2017-06-27).
Deutsche Telekom AG (DTEGY) was down 1.9% following reports that
Sprint Corp. (S) may hold off on talks about a merger with
T-Mobile, a unit of Deutsche Telekom's. Sprint is trying to form a
wireless partnership
(http://www.marketwatch.com/story/sprint-explores-wireless-deal-with-comcast-charter-2017-06-26)
with Comcast (CMCSA) and Charter Communications (CHTR).
Schaeffler AG shares (SHA.XE) tanked 11% after the German auto
parts supplier cut its profit forecast for 2017.
Bankia SA (BKIA.MC) leapt 4.3% following a deal to purchase
fellow nationalized Spanish lender BMN.
(END) Dow Jones Newswires
June 27, 2017 05:46 ET (09:46 GMT)
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