By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks dropped Friday, with
German equities turning sharply lower, following reports of a
flare-up in tensions between Ukraine and Russia.
Ukrainian forces destroyed part of a Russian military unit that
was on Ukrainian soil, according to a Ukrainian military
spokesperson quoted by various news sources. The spokesperson said
Russian vehicles entered Ukraine through a section of the border
held by rebels, which prompted the engagement, according to
Bloomberg.
Ukraine President Petro Poroshenko's website said most of the
Russian military vehicles that crossed into the country Thursday
night have been destroyed.
Market reaction: The Stoxx Europe 600 index had been cruising
higher, with intraday gains of roughly 1%, when news of the
military confrontation came roughly 45 minutes before the end of
trading. The pan-European index was then twisted lower, closing
with a loss of 0.4% at 329.72.
The German DAX 30 index was yanked down 1.4% to 9,092.60, but
had up by as much as 1.1% before the turnaround. The German economy
-- the largest in Europe -- has been considered among the most
vulnerable in the region to the impact of the conflict between
Russia and Ukraine.
Investors also darted into so-called safe-haven assets, a move
that pushed the yield on Germany's 10-year bond to an all-time low
of 0.965% late Friday.
Russia's MICEX held to higher ground, ending up 0.7% at
1,417.82. The euro (EURUSD) bought $1.3389 compared with $1.3395
before reports of the confrontation. The shared currency bought
$1.3367 late Thursday.
French stocks were hit, leaving the CAC 40 down 0.7% at
4,174.36. The U.K.'s FTSE 100 narrowed its gain, ending up 0.1% at
6,689.08. Also read: BHP outperforms FTSE 100.
In the U.S., the S&P 500 index (SPX) and the Dow Jones
Industrial Average (DJI) reversed gains. (Read more about U:S:
market action Friday
http://www.marketwatch.com/story/us-stocks-futures-up-consumers-may-be-in-better-mood-2014-08-15.).
Movers
Here are some of the European companies whose shares were in
focus Friday:
A.P. Moller-Maersk AS rose 0.7% as the Danish conglomerate was
upgraded to overweight from neutral at J.P. Morgan Cazenove.
BHP Billiton Ltd. shares climbed 1.2%, as the world's largest
mining company by market value said it favors spinning off a range
of assets to focus more on commodities such as iron ore. Such a
move could create a separately listed company valued at more than
$8 billion.
Carillion PLC fell 4% after Balfour Beatty PLC again rejected
the takeover offer from its rival in the construction sector.
Hennes & Mauritz AB tacked on 0.7% following a 17% rise in
total July sales at the Swedish fashion retailer, known for its
H&M stores.
For the week, the Stoxx 600 index closed up 1.5%.
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