By Sara Sjolin, MarketWatch

Iliad tanks after disappointing earnings

European stocks ended a volatile session slightly higher on Tuesday, as traders digested a mixed bag of economic data and a deluge of corporate news.

Italian stocks advanced as talks between two antiestablishment parties continued.

What are markets doing?

The Stoxx Europe 600 index rose 0.1% to close at 392.37, after swinging between small gains and losses throughout the day.

Italy's FTSE MIB index rose 0.3% to 24,297.17 as traders continued to watch developments in Italian politics.

Germany's DAX 30 index fell 0.1% to 12,970.04, while France's CAC 40 rose 0.2% to 5,553.16.

The U.K.'s FTSE 100 index ended 0.2% higher at 7,722.98 (http://www.marketwatch.com/story/uk-stocks-flutter-as-jobs-data-loom-2018-05-15).

The euro was down at $1.1865 compared with $1.1929 late Monday in New York. The pound traded at $1.3510, down from $1.3556 on Monday.

The two currencies lost momentum against the dollar after a strong U.S. retail report (http://www.marketwatch.com/story/dollar-rises-a-second-day-as-trade-talks-retail-data-take-center-stage-2018-05-15).

What's driving markets?

The indecisive trading action on Tuesday came after a raft of economic data. Eurozone gross domestic product numbers met expectations, while German economic sentiment figures missed forecasts. In the U.K., the unemployment rate remained at a 42-year low.

Meanwhile, Italian politics remained in focus. Last minute hiccups have emerged in the plans by the populist 5 Star Movement and League parties to form a coalition, with the main sticking point appearing to be who to nominate to the role of prime minister.

What are strategists saying?

"Some very radical populist ideas are being floated [in Italy] such as flat income tax at 15% (League) and guaranteed income for the poor (Five Star). These ideas will not sit well in Brussels or the bond market," said economists at Danske Bank in a note on Tuesday.

"In terms of market reaction, after years of fear over a populist government in Italy, the bond market reaction has the distinct air of nonchalance. Italian bond yields have risen only moderately over other periphery or core debt," they added.

The yield on 10-year Italian government bonds was up 4 basis points at 1.951% on Tuesday.

Stock movers

Iliad SA (ILD.FR) tanked 20% after a disappointing earnings report (http://www.marketwatch.com/story/iliad-q1-revenue-edges-up-on-mobile-business-2018-05-15)from the French telecoms group. Iliad also said it's appointed Thomas Reynaud as new chief executive officer, effective May 21.

Pandora A/S (PNDORA.KO) slumped 16% after the Danish jewelry company reported a 15% drop in profit (http://www.marketwatch.com/story/pandora-backs-guidance-despite-higher-costs-2018-05-15).

Merck KGaA (MRK.XE) slid 6.3% after the German chemicals and pharmaceutical company said first-quarter sales declined (http://www.marketwatch.com/story/merck-kgaas-sales-hit-by-currency-headwinds-2018-05-15), hurt by currency headwinds.

Commerzbank AG (CBK.XE) put on 3.9% after the German lender said profit rose 9.2% in the first quarter (http://www.marketwatch.com/story/commerzbank-profit-rises-despite-sales-slump-2018-05-15).

Shares of Vodafone Group PLC (VOD.LN) (VOD.LN) dropped 4.3% after the telecom giant said its chief executive Vittorio Colao will step down (http://www.marketwatch.com/story/vodafone-cfo-to-succeed-ceo-colao-in-october-2018-05-15) and be succeeded by Chief Financial Officer Nick Read, effective Oct. 1.

EasyJet PLC (EZJ.LN) rose 3.3% after the budget airline said its pretax loss for the first half of fiscal 2018 narrowed (http://www.marketwatch.com/story/easyjet-first-half-loss-narrows-on-higher-revenue-2018-05-15), driven by record revenue a reduction in capacity by other airlines.

Economic data

The German ZEW economic sentiment gauge stayed at negative 8.2 in May, missing forecasts of a negative 7.8 reading.

Staying in Germany, gross domestic product for the first quarter expanded 1.6% year-over-year (http://www.marketwatch.com/story/german-labor-issues-dent-economic-growth-2018-05-15), below forecasts of a 1.7% reading and down from 2.3% in the previous quarter.

GDP in the eurozone grew 0.4% quarter-on-quarter, confirming the preliminary reading.

In France, the statistics agency Insee lifted its estimate of 2017 GDP growth to 2.2% (http://www.marketwatch.com/story/france-raises-2017-gdp-growth-estimate-to-22-2018-05-15) from the 2% estimated previously.

In the U.K., the Office for National Statistics said the unemployment rate remained at 4.2% in March, while wages excluding bonuses rose 2.9%.

 

(END) Dow Jones Newswires

May 15, 2018 12:20 ET (16:20 GMT)

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