EUROPE MARKETS: European Stocks End Lower For 6th Straight Session, Hit By Stronger Euro, China Worries
November 14 2017 - 12:26PM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
Shared currency rises after stronger-than-expected German GDP
reading
European stocks closed lower for a sixth session in a row
Tuesday, hurt as the euro leapt to a three-week high on the back of
stronger-than-expected economic growth figures from the eurozone,
while miners shares slumped on worries about growth in China.
What markets are doing: The Stoxx Europe 600 fell by 0.6% to end
at 383.86, registering its lowest close since Sept. 22, FactSet
data showed.
The DAX 30 index declined 0.3% to close at 13,033.48, and
France's CAC 40 gave up 0.5% to finish at 5,315.58.
The U.K.'s FTSE 100 shed less than 0.1% to close at 7,414.42,
giving up earlier gains, and Spain's IBEX was down 0.6% at
9,990.40, notching its first close below 10,000 since early
October.
The euro traded at $1.1768, rising from $1.1669 late Monday in
New York.
What's driving markets: As Chinese companies are major buyer of
industrial and precious metals, mining shares were pushed lower
Tuesday following data that showed the country's industrial output
slowed in October
(http://www.marketwatch.com/story/china-industrial-output-slows-in-oct-as-expected-2017-11-13).
Also, housing sales fell and construction starts slowed.
(http://www.marketwatch.com/story/china-housing-sales-slow-year-over-year-in-october-2017-11-13)The
Stoxx Europe 600 Basic Resources Index tumbled 2.7%.
At the same time, the euro climbed above $1.1700 for the first
time since Oct. 26, putting the shared currency up by roughly 1%
just two days into this week.
Strength in the euro puts pressure on shares of European
exporters, as it makes their products more expensive for holders of
other currencies. On the German index, shares of Volkswagen AG
(VOW.XE) (VOW.XE) pulled 1% lower and BMW AG (BMW.XE) fell
0.1%.
Investors bumped up the euro after government statistical office
Destatis said gross domestic product in Germany, Europe's largest
economy, rose by 3.3% in the third quarter
(http://www.marketwatch.com/story/german-gdp-grows-33-outstripping-forecasts-2017-11-14),
outstripping expectations for 2.4% growth. Also, Italy's annualized
growth of 1.7%
(http://www.marketwatch.com/story/germany-italy-add-impetus-to-eurozone-recovery-2017-11-14)
was the largest since the first quarter of 2011.
Read:The strong euro is just a quarter of the battle for Italy
in 2018
(http://www.marketwatch.com/story/the-strong-euro-is-just-a-quarter-of-the-battle-for-italy-in-2018-2017-11-13)
Meanwhile, the dollar was dragged by ongoing worries about
delays in passage of corporate tax proposals into law in
Washington. The prospect of lower U.S. taxes has helped drive up
equity markets world-wide over the past year, including bank
stocks. The Stoxx Europe 600 Bank Index fell 0.8%.
What strategists are saying: Deutsche Bank on Tuesday downgraded
German equities to underweight from overweight, saying they've
outperformed the European benchmark by 6% since its upgrade in
mid-August.
Among other factors driving the downgrade,German equities'
prices no longer look too low relative to the trajectory suggested
by euro-area PMI momentum, Deutsche Bank European equity strategist
Wolf von Rotberg wrote in a research note.
Stock movers: Infineon Technologies AG (IFX.XE) jumped 2.7% on
the DAX 30. The chip maker's net profit for the fourth quarter fell
22%
(http://www.marketwatch.com/story/infineon-net-profit-down-22-on-weaker-dollar-2017-11-14)
as the company faced a strong headwind from dollar
depreciation.
Henkel AG & Co. (HEN.XE) dropped 4.3% after the company said
third-quarter net profit fell to 564 million euros
(http://www.marketwatch.com/story/henkel-profit-falls-on-fx-effects-raises-forecast-2017-11-14)($657.4
million) from EUR576 million a year ago. The maker of Dial soap and
Purex laundry detergent raised its forecast for adjusted
earnings.
Tesco shares (TSCO.LN) climbed 6.2% after the U.K. Competition
and Markets Authority provisionally cleared a merger between the
supermarket chain and wholesaler Booker Group (BOK.LN). Booker's
shares, which trade off the FTSE 100, climbed 6.8%.
Vodafone (VOD.LN) (VOD.LN) jumped 5.1% after the telecom raised
its outlook for fiscal 2018
(http://www.marketwatch.com/story/vodafone-pretax-profit-up-55-lifts-2018-outlook-2017-11-14),
with pretax profit for the first half rising 55%
year-over-year.
Economic data: U.K. inflation came in at 3% in October
(http://www.marketwatch.com/story/uk-inflation-stays-at-5-year-high-of-3-2017-11-14),
slightly below expectations for a 3.1% print.
(END) Dow Jones Newswires
November 14, 2017 12:11 ET (17:11 GMT)
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