By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets dropped on
Monday, with shares of Carlsberg AS among the biggest decliners
after a disappointing earnings report.
The Stoxx Europe 600 index lost 0.2% to close at 286.76, losing
ground for a third straight day.
U.S. markets were closed for the Presidents Day holiday.
"Today is a featureless day with the markets not doing very
much," said John Redwood chief of the investment committee at
Evercore Pan-Asset, referring to the U.S. market closure and a lack
of major economic-data releases.
"We did get some reassurance that Germany is likely to avoid
recession and that would be taken as good news," he said. "A strong
Germany is helpful for the recovery and is more likely to help
other European countries."
Shares of Carlsberg AS slumped 5.8% after the Danish brewer said
market dynamics in 2013 are expected to be similar to those of
2012, while posting a fourth-quarter result below expectations.
.
Shares of Telefonica SA fell 1.1%. The telecom firm said late
Friday that it will take a 438 million euro ($586 million) hit on
its 2012 earnings to reflect the impact of Venezuela's recent
currency devaluation.
On an upbeat note, shares of Natixis jumped 22.5% as the French
bank said it plans to sell holdings valued at EUR12.1 billion to
simplify its structure. That will create an exceptional
distribution to the shareholders of EUR2 billion. Additionally,
Citigroup lifted the bank to buy from neutral.
The broader European market failed to take inspiration from an
upbeat mood in Asia.
Japanese shares soared as the Group of 20 nations didn't single
out Japan for weakening its currency. Instead the group said it
would refrain from competitive devaluation and pledged to monitor
negative currency spillovers to other countries amid talks of
currency wars between major world economies. and .
"It is quite clear now that there will be no international
criticism of Japan as long as its exchange rate isn't the target of
its economic policies. This is positive for financial markets and
the global economy as expansionary monetary policy in the major
economies is helping to stabilize global growth," analysts at
Danske Bank said in a note.
"The discussion of a 'currency war' is also somewhat arbitrary
as all monetary-policy changes have the potential to affect a
country's exchange rate and one could therefore also label
interest-rate cuts as currency manipulation," they said. .
In the same vein, the euro (EURUSD) slipped to $1.3348 after
European Central Bank President Mario Draghi in remarks to the
European Parliament committee repeated that the euro's exchange
rate is an important factor, but not a policy target.
Draghi repeated that the ECB would monitor the impact of the
euro's moves on its inflation assessment. .
Movers
Among notable movers in Europe, German shares rose after the
Bundesbank in its monthly report said Germany will avoid recession
and return to growth in the first quarter of 2013, with an
improvement in the industrial sector supporting the recovery. Data
showed last week that the German economy--Europe's
largest--contracted 0.6% in the fourth quarter of 2012. .
The DAX 30 index gained 0.5% to 7,628.73.
Shares of Deutsche Lufthansa AG gained 1.7% as Deutsche Bank
lifted the airline to buy from hold.
Daimler AG picked up 1.1% after UBS added the car maker to its
most preferred list.
Shares of BMW AG slipped 0.4% as UBS cut the firm to neutral
from buy.
Elsewhere, mining firms posted some of the biggest losses.
In the U.K., shares of Anglo American lost 2.8%, after the miner
said a total of 12 workers and security personnel were injured with
rubber bullets at an Anglo American Platinum Ltd.'s South Africa
mine. Anglo American holds a majority stake in Anglo American
Platinum.
The FTSE 100 index closed 0.2% lower at 6,318.19, with Royal
Bank of Scotland Group PLC (RBS) off 1.4%.
And in France, BNP Paribas SA lost 1.4%.
Shares of Accor SA erased 2.5%, as Deutsche Bank cut the hotel
operator to sell from hold.
The CAC 40 index however, closed 0.2% higher at 3,667.04, with
oil group Total SA (TOT) up 0.4%
Outside the major indexes, shares of Novozymes AS lost 2.6%
after UBS cut the enzyme manufacturer to sell from neutral, saying
the valuation is too optimistic given the current growth
targets.
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