By Sara Sjolin, MarketWatch
LONDON (MarketWatch)--European stock markets ended a choppy
session slightly higher on Wednesday, as investors stayed on the
sidelines ahead of a U.S. holiday, while also digesting news that
euro-zone finance ministers failed to agree on conditions for
further aid for Greece.
The Stoxx Europe 600 index closed 0.2% higher at 270.11, after
swinging between small gains and losses.
"I'm surprised by the lack of reaction over Greece. It's part of
the two big issues at the moment--the euro zone and the fiscal
cliff," said Richard Perry, chief market strategist at Central
Markets in London.
An impending U.S. holiday might already be having some impact on
investors in London and on the Continent.
"It's Thanksgiving tomorrow and investors are winding down a
little ahead of that. The fiscal cliff seems to have dominated
thoughts recently and markets rallied after we had good news on
that over the weekend," he said.
"But markets have been fairly quiet since that reaction and
we're in wait-and-see mode ahead of Thanksgiving and until
[President Barack] Obama and Congress resume talks next week."
U.S. markets are closed Thursday and will see an abbreviated
session on Friday.
U.S. stocks traded mostly higher on Wall Street, on the back of
data showing initial jobless claims dropped by 41,000 last week to
410,000. and
In London, shares of Johnson Matthey PLC dropped 5.8%, pulling
back after the chemicals firm posted a 6% decline in first-half
pretax profit on the back of lower metals prices. The company also
flagged expectations for its second-half performance, saying it
should be similar to that of the first half.
Shares of Xstrata PLC rose 1.1% and those of Glencore
International PLC picked up 0.7%, as European Union regulators
moved closer to approving a merger between the two companies.
And in Frankfurt, shares of Siemens AG (SI) lost 1.3%, after
Deutsche Bank cut its rating on the industrial conglomerate to sell
from hold, citing portfolio issues and valuation reasons.
"Siemens has attractive world-class assets but also has
businesses that it would probably not buy today if it did not
already own them," Deutsche Bank's analysts said.
No deal on Greece
For investors, Greece was squarely back in the European
spotlight.
Eurogroup President Jean-Claude Juncker said early Wednesday
morning that the region's finance ministers didn't complete an
agreement that would clear the way for bailout funds for the
country. A disagreement with the International Monetary Fund over
how to put Greece's debt load on a sustainable path remains a
sticking point.
Instead, the ministers will resume talks Nov. 26 to allow time
for "further technical work on some elements of this package,"
Juncker said, adding that the Eurogroup made progress in
"identifying a consistent package of credible initiatives."
Analysts at Deutsche Bank took note of the state of play
regarding Greece, especially its ratio of debt to gross domestic
product.
The document prepared for the meeting "suggests that Greece's
debt cannot be cut to 120% of GDP by 2020 (the level deemed
sustainable by the IMF) without haircuts on Greek loans held by the
official sector. We suspect whether Greece needs additional debt
haircut was probably one of the key sticking point in the
negotiations," they wrote in a note.
And for a second day in a row, France's sovereign-credit rating
came in for attention.
Fitch Ratings said it would review its rating for the country
during 2013. Late Monday, Moody's Investors Services stripped what
had been a triple-A rating for France, following a downgrade by
Standard & Poor's Ratings Services in January.
In the U.K., minutes from the Bank of England's latest
policy-setting meeting showed one member voted in favor of
increasing the central bank's asset-purchase program by 25 billion
pounds ($596.2 billion).
Movers
Among Wednesday's notable movers, shares of Veolia Environnement
SA (VE) rose 1.3% in Paris, gaining as the environmental-services
firm closed on the sale of its U.S. solid-waste operations for
$1.91 billion.
The CAC 40 index rose 0.4% to 3,477.36.
In London, the FTSE 100 index inched 0.1% higher to 5,752.03,
with oil firms tracking oil prices higher. Shares of BG Group PLC
picked up 2.8% and Royal Dutch Shell PLC (RDSB) added 0.5%.
Frankfurt's DAX 30 index also moved narrowly higher, up 0.2% at
7,184.71.
Shares of K+S AG lost 3.1%, after J.P. Morgan Cazenove lowered
its rating on the potash maker to underweight from neutral.
Outside the main indexes, shares of Pronova Biopharma ASA jumped
4.6%, after it received a takeover offer valued at 3.76 billion
Norwegian kroner ($653.6 million) from German chemicals giant BASF
SE . Shares of BASF closed marginally lower. .
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