By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks lost ground Wednesday,
with LM Ericsson AB among the decliners pulling the region's
benchmark index back from its hefty gain in the previous
session.
The Stoxx Europe 600 shed 0.4% to 335.82, handing back a small
portion of Tuesday's 1.4% jump that was led by a rally in drug
makers.
Investors on Wednesday received a better-than-expected reading
for euro-zone manufacturing activity in April, but stocks remained
lower after the data. An initial reading of Markit's manufacturing
Purchasing Managers' Index came in at 53.3, a three-month high that
surpassed expectations for a 53.0 reading.
In country-specific breakdowns of activity, "there were upside
surprises on the German PMIs, but disappointment in the
corresponding French indices," said James Ashley, chief European
economists at RBC Capital Markets in a review of the data. From the
perspective of the European Central Bank, the PMIs "are certainly
not strong enough to preclude any ECB intervention if other
economic indicators disappoint ... but the news from today's
surveys is, on balance, moderately encouraging," said Ashley.
Germany's DAX 30 lost 0.4% to 9,566.50, and France's CAC 40
declined 0.4% to 4,465.09. The U.K.'s FTSE 100 turned lower by 0.2%
to 6,671.05.
Struggling on Wednesday were shares of Ericsson , falling 4.9%
after the Swedish mobile-network company posted an unexpectedly
sharp decline in quarterly revenue to 47.51 billion Swedish kronor
($7.21 billion), from 52.03 billion kronor a year earlier. That
missed a consensus projection from analysts of 50.80 billion
kronor.
ARM Holdings PLC shares were off 3.2% as the computer-chip
designer was unable to gain traction after reporting a rise in
first-quarter profit. Included in that report was 3% year-over-year
growth in royalty revenue to $144.5 million, compared with 32%
growth in the year-ago quarter.
Drax Group PLC shares lost the most on the Stoxx 600 index. They
sank 10.5% after one of the British power generator's projects was
left off a government list of renewable energy projects eligible
for a new system of subsidies. Drax plans to launch legal action to
contest the decision, saying the government told it late last year
that support for two of its units scheduled for coal-to-biomass
conversion in northern England would available.
But the session's stock winners were paced by an 8.7% leap in
Associated British Foods PLC as the company plans to open Primark
stores in the northeastern region of the U.S. Primark's lineup
includes clothing and accessories, shoes, and housewares. AB Foods
said strength from the Primark chain and grocery units aided in a
rise in half-year profit.
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