EUROPE MARKETS: European Stocks Swing To Positive For The Week, Tracking U.S. Stocks Higher
February 23 2018 - 12:27PM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
RBS shares drop after results; Deutsche Telekom shares rise
European stocks ended a bouncy session slightly higher on
Friday, tracking gains for U.S. stocks as traders waded through a
stream of corporate updates.
How markets are trading
After shifting between small gains and losses through the day,
the Stoxx Europe 600 index ended 0.2% higher at 381.16. That helped
swing the pan-European benchmark into positive territory for the
week, ending with a 0.1% weekly gain.
France's CAC 40 closed up 0.2% at 5,317.37, while Germany's DAX
30 index rose 0.2% to 12,483.79.
Underperforming the major European indexes, the U.K.'s FTSE 100
dropped 0.1% to 7,244.41
(http://www.marketwatch.com/story/ftse-100-slips-heads-toward-weekly-loss-as-rbs-drops-after-results-2018-02-23).
(http://www.marketwatch.com/story/european-stocks-struggle-as-hsbc-bhp-billiton-updates-disappoint-2018-02-20)The
euro bought $1.2296, down from $1.2332 late Thursday in New
York.
The yield on the 10-year German bond fell 5 basis points to
0.650%, according to Tradeweb. Yields fall when prices rise.
What's driving markets
European equities this week have largely followed moves on Wall
Street. Analysts have said the recent global rout in stocks stemmed
largely from concerns that a quickening pace of U.S. inflation
could prompt the Fed to raise interest rates more than anticipated
this year.
In its latest report to Congress, the Federal Reserve gave no
signs it was planning to hike rates
(http://www.marketwatch.com/story/fed-on-track-for-3-rate-hikes-in-2018-but-4-no-sign-in-report-to-congress-2018-02-23)
faster than currently expected, reflecting uncertainty among senior
officials about how fast inflation will rise this year.
U.S. stock moved firmly higher on Friday,
(http://www.marketwatch.com/story/dow-futures-surge-over-100-points-2018-02-23)
after the S&P 500 and the Dow Jones Industrial Average finished
Thursday with gains
(http://www.marketwatch.com/story/dow-futures-slide-more-than-100-points-as-fed-driven-jitters-persist-2018-02-22).
What strategists are saying
"Fears revolving around rising inflationary pressures and rate
hike jitters have certainly left investors skittish this trading
week. Investors seem to be on edge about higher interest rates and
as such, this continues to encourage global equity bulls and bears
to engage in a tough tug of war," said Lukman Otunuga, research
analyst at FXTM.
"With investors on guard as global stock markets become
increasingly sensitive to the prospect of rising inflation and
interest rates, equity bears could steal the show," he said in a
note.
Stock movers
Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN) shares
dropped 4.8% as the majority state-owned lender posted its first
full-year profit in 10 years. However, RBS said it has yet to agree
a settlement
(http://www.marketwatch.com/story/rbs-posts-first-full-year-profit-in-a-decade-as-litigation-costs-drop-2018-02-23)
with the U.S. Department of Justice over alleged mis-selling of
mortgage-backed securities.
Phoenix Group Holdings shares (PHNX.LN) jumped 7.3% after the
insurer said it bought Standard Life Assurance Ltd. from Standard
Life Aberdeen PLC in a reverse takeover for GBP2.93 billion ($4.09
billion). Shares of Standard Life Aberdeen (SLA.LN) ended down
2.5%.
Deutsche Telekom AG (DTEGY) shares rose 3.3%. The German
telecommunications company said late Thursday it had returned to
profit in the fourth quarter of 2017
(http://www.marketwatch.com/story/deutsche-telekom-swings-to-profit-in-4q-2018-02-22-14855018),
largely boosted by the effects of U.S. tax reform.
Swiss Re (SSREY) rose 2.5% after the reinsurance heavyweight
said it's not considering issuing new capital
(http://www.marketwatch.com/story/swiss-re-profit-falls-assessing-softbank-alliance-2018-02-23).
The company did say it's "carefully assessing" the implications of
a deal with SoftBank Group Corp. (9984.TO) , and it reported a fall
in net profit in 2017.
Valeo SA (FR.FR) tumbled 11%. The French automotive supplier
said late Thursday its 2017 net profit fell year-on-year
(http://www.marketwatch.com/story/valeo-profit-falls-despite-higher-sales-2018-02-22),
despite both sales and order intake increasing.
International Consolidated Airlines Group SA shares (IAG.LN)
(IAG.LN) fell 5.7%. The British Airways parent said it was engaging
a EUR500 million share-buyback program
(http://www.marketwatch.com/story/iag-expects-better-2018-eyes-sensible-growth-2018-02-23),
and that pretax profit rose in 2017. The results were "mixed," said
Accendo Markets, with revenues in line. while adjusted per-share
earnings of EUR1.02 fell short of a EUR1.06 consensus estimate.
Economic data
Economic activity in Germany slowed toward the end of 2017, but
a booming export sector kept Europe's largest economy on a solid
growth path, according to new data. Germany's Federal Statistical
Office said gross domestic product grew 0.6%
(http://www.marketwatch.com/story/german-gdp-eases-to-25-in-q4-but-exports-boom-2018-02-23),
or an annualized rate of 2.5%, in the fourth quarter, easing
somewhat toward the end of 2017. The report confirmed preliminary
figures.
Eurostat confirmed that eurozone inflation was at 1.3% in
January, down from 1.4% in December.
(http://www.marketwatch.com/story/euro-slips-after-ecb-minutes-show-preference-for-keeping-easing-bias-2018-02-22)
(END) Dow Jones Newswires
February 23, 2018 12:12 ET (17:12 GMT)
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