By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets moved lower on
Wednesday, pulling back after their biggest rally in eight months,
as investors waited for a batch of economic data from Europe and
the U.S.
The Stoxx Europe 600 index slipped 0.2% to 336.62, after jumping
2.1% on Tuesday. The move was the largest one-day percentage gain
since early July, triggered by easing tensions between Russia and
Ukraine after Russian troops reportedly were called back to their
bases and President Vladimir Putin stressed he wouldn't use
military force yet.
Among major movers in Wednesday's trade, shares of Subsea 7 SA
dropped 5.8% after the offshore-engineering firm said earnings per
share fell more than 40% in the fourth quarter.
Shares of Melrose Industries PLC dropped 5.6% after the
investment company reported a rise in full-year adjusted pretax
profit, but says it faces headwinds from the current strength of
the pound.
On a more upbeat note, shares of Carrefour SA advanced 1.1%
after the French supermarkets giant said operating profit grew 5.4%
last year.
More broadly, investors waited for the U.K. services PMI and the
second estimate of euro-zone GDP, with the former due at 9:30 a.m.
in London, or 4:30 a.m. Eastern Time, and the latter at 10 a.m. In
the afternoon, the U.S. ADP jobs report is likely to be watched for
any clues on how strong February nonfarm payrolls have been ahead
of the release on Friday.
Investors also watched out for developments in the
Ukraine/Russia standoff, with Nato and Russia expected to discuss
the latest developments at a special meeting on Wednesday. Nato
said on Tuesday it continued to support a peaceful solution to the
crisis, but that Russia is violating "Ukraine's sovereignty and
territorial integrity."
Analysts at UBS said markets shouldn't underestimate what's at
stake and that the "risk premia in financial assets certainly do
not seem excessive." The situation is a "bad advertisement" for
emerging markets at a sensitive time, they said, and the
consequence could be redemption pressures on emerging-market bond
funds.
"If the situation in Ukraine fails to de-escalate, we believe
flow pressure on EM funds could impact markets such as Hungary,
South Africa and Turkey, which have minimal economic linkages with
Russia and Ukraine," they said.
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