EUROPE MARKETS: European Stocks Finish At 2-month Lows As Central Banks Jolt Currencies
June 28 2017 - 1:30PM
Dow Jones News
By Carla Mozee, MarketWatch
French consumer confidence at 10-year high
European stocks on Wednesday closed a topsy-turvy session at a
two-month low, with the euro pulled lower intraday while the pound
leapt as investors reassessed policy stances at both the European
Central Bank and the Bank of England.
The Stoxx Europe 600 closed down less than 1 point at 385.82,
but that still represented the lowest close since April 21.
Financial, consumer services and oil and gas shares finished
higher, but health care, tech and utilities fell.
ECB rethink: The euro looked on course to hit $1.14 for the
first time since June 2016, but was yanked to an intraday low of
$1.1292 following reports that ECB officials said the markets had
misjudged comments made a day earlier by ECB President Mario
Draghi.
Read:ECB's Draghi hints at winding down eurozone QE
(http://www.marketwatch.com/story/ecbs-draghi-hints-at-winding-down-of-eurozone-qe-2017-06-27)
The euro climbed from $1.12 on Tuesday after Draghi said in a
speech that "a considerable degree" of stimulus is needed in the
eurozone, a step back from the more dovish language used in earlier
speeches.
A stronger euro can hurt shares of European exporters on the
prospect that it could cut into sales of goods to overseas
clients.
"ECB Vice President Vito Constancio further added that Draghi
did not say anything new in his speech that was not totally in line
with the ECB's current policy. It is rare that a central bank will
comment on how the market may be misinterpreting its intensions,"
said Stephen Simonis, chief currency consultant for FXDD Global, in
a note.
"However, this move shows that the ECB was disappointed with the
drop in the euro that resulted."
Major European benchmarks turned modestly higher as the euro
declined, but many of them eventually settled slightly in the
red.
Indexes: In Frankfurt, the export-heavy DAX 30 closed off
session lows, ending down 0.2% at 12,647.27. France's CAC 40 index
finished down 0.1% at 5,252.90.
But Italy's FTSE MIB climbed 1.2% to 21,047.80, with lender
UniCredit (UCG.MI) up 4.1%. Spain's IBEX 35 picked up 0.5% to
10,702.70, with lender Bankia SA (BKIA.MC) tacking on 4%.
In London, the FTSE 100 dropped 0.6% to 7,387.80.
Pound leaps: The FTSE 100 had been trading lower during the
session but was hurt further as the pound popped up above $1.2900
for the first time since the U.K.'s general election earlier this
month resulted in a hung parliament.
A higher pound can put pressure on earnings overseas by
multinational companies that make up a large share of the FTSE 100.
The pound soared after Bank of England Gov. Mark Carney said the
case for raising U.K. interest rates could be made if wage growth
and business investment increase, even if consumer spending is
weak.
Carney made his comments at the ECB's forum on central banking
in Portugal, where Draghi and Bank of Japan Gov. Haruhiko Kuroda,
also appeared.
Stock movers: ABN Amro Group NV (ABN.AE) fell 1.9% after the
Dutch government cut its stake in the bank to 63% from 70%.
Royal Philips NV (PHG) lost 1.7% after the Dutch
health-technology company said it is buying Spectranetics Corp.
(SPNC)for 1.9 billion euros ($2.15 billion).
(http://www.marketwatch.com/story/royal-philips-to-buy-spectranetics-for-215-bln-2017-06-28)
Bunzl PLC shares (BZLFY) climbed 2.1% after the distribution and
outsourcing group said revenue for the first half of the year
increased by 7%
(http://www.marketwatch.com/story/bunzl-revenue-rises-7-buys-3-more-businesses-2017-06-28)
and that it's bought three businesses as part of its growth
strategy.
Economic docket: In France, consumer confidence hit its highest
since June 2007
(http://www.marketwatch.com/story/french-consumer-confidence-at-highest-in-10-years-2017-06-28),
said statistics agency Insee.
(END) Dow Jones Newswires
June 28, 2017 13:15 ET (17:15 GMT)
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