EUROPE MARKETS: European Stocks End Lower, Falling From 2-week High After Tepid Data
23 Setembro 2016 - 1:59PM
Dow Jones News
By Sara Sjolin and Victor Reklaitis, MarketWatch
But Stoxx 600 snags 2.2% weekly gain
European stocks moved decisively lower on Friday, giving back a
chunk of the prior day's rally after economic data painted a mixed
picture of the region's recovery.
The Stoxx Europe 600 index slumped 0.7% to finish at 345.34,
partly erasing a 1.6% advance from Thursday that saw the benchmark
close at its highest level since Sept. 8.
For the week, the Stoxx 600 still achieved a 2.2% advance, its
biggest since mid-July.
The week's gains
(http://www.marketwatch.com/story/european-stocks-climb-as-fed-inspires-risk-taking-2016-09-22)
came as the U.S. Federal Reserve refrained from raising interest
rates and indicated it would keep monetary policy loose for at
least another few months. Traders in Europe and the U.K. closely
watch where U.S. interest rates are headed, as they are a major
driver for the global economy and currency markets.
PMIs in the frame: However, on Friday the optimism fizzled,
partly due to a disappointing reading in the purchasing managers
index for September
(http://www.marketwatch.com/story/french-revival-lifts-eurozone-pmi-germany-falters-2016-09-23),
which indicated the pace of growth for private-sector activity in
the region slowed. The eurozone flash composite PMI dropped to a
20-month low of 52.6, missing forecasts of a 52.8 print. A reading
of more than 50 indicates an expansion in private-sector
activity.
"It is apparent that [the] eurozone is currently finding it a
real struggle to break out of lackluster growth, even if there is
little evidence that the U.K.'s Brexit vote in June has had a
significant dampening influence," said Howard Archer, chief U.K.
and European economist at IHS Global Insight.
"We suspect eurozone economic activity could be increasingly
hampered by political uncertainty over the coming months, with
elections due in 2017 in France and Germany, Spain facing a third
general election before long, and the Renzi government looking
vulnerable in Italy," he said.
A bright spot in the PMI readings was France, where the
composite PMI climbed to a 15-month high. In Germany, however,
activity in the services sector disappointed, taking the composite
reading to a 16-month low.
Germany's DAX 30 index closed down 0.4% at 10,626.97, while
France's CAC 40 index dropped 0.5% to 4,488.69.
The euro traded at $1.1231, up from $1.1209 late Thursday in New
York.
The U.K.'s FTSE 100 index closed down
(http://www.marketwatch.com/story/uk-stocks-pull-back-led-lower-by-drops-for-miners-2016-09-23)
by less than 0.1% at 6,909.43.
Movers: Shares in Sports Direct International PLC (SPD.LN)
jumped 5.5% on the midcap FTSE 250 after the embattled retailer
said founder and major shareholder Mike Ashley is taking over as
chief executive
(http://www.marketwatch.com/story/sports-direct-shares-rally-as-founder-mike-ashley-takes-over-as-ceo-2016-09-23)
with immediate effect. The management change comes after the shock
resignation of longtime CEO Dave Forsey.
Helping to lead the way lower in Europe, Indivior PLC (INDV.LN)
slumped 3.9% after news that 35 U.S. states are now backing a
lawsuit against the British pharmaceutical company for allegedly
anticompetitive behavior.
RWE AG (RWE.XE) dropped 0.6% after the German utility company's
renewable energy unit Innogy SE said shares worth up to about EUR5
billion
(http://www.marketwatch.com/story/rwes-renewables-unit-eyes-56-billion-share-sale-2016-09-23)
($5.6 billion) will be offered in its initial public offering.
Banks also posted big losses, with shares of Popular Espanol SA
(POP.MC) down 2.7%, Royal Bank of Scotland Group PLC (RBS.LN)
(RBS.LN) off 2.1% and Deutsche Bank AG (DBK.XE) 2% lower.
Commerzbank AG (CBK.XE) closed down 0.3%. The German lender is
eyeing at least 5,000 job cuts as part of a broader overhaul
(http://www.marketwatch.com/story/commerzbank-eyes-at-least-5000-job-cuts-sources-2016-09-23)
to address weak profitability in a world of low interest rates and
lackluster client activity, according to people familiar with the
plan.
On the sidelines: European Central Bank Vice President Vítor
Constâncio said at a conference in Frankfurt on Friday that the
policy makers are aware that low interest rates over a longer
period could threaten financial stability
(http://uk.reuters.com/article/uk-ecb-policy-constancio-idUKKCN11T0LX),
Reuters reported.
His comments follow a speech by ECB President Mario Draghi on
Thursday, who warned overcapacity in the banking sector is eroding
profits
(http://www.marketwatch.com/story/ecbs-draghi-warns-crowded-banking-sector-is-squashing-profits-2016-09-22).
Boris Johnson said Thursday he expects the U.K. to formally
begin its exit
(http://www.marketwatch.com/story/uk-aims-to-start-brexit-talks-in-early-2017-says-boris-johnson-2016-09-23)
from the European Union in the early months of next year, speaking
to Sky News. Britain's foreign minister also said he doesn't think
the U.K. government will need the full two-year window for the
Brexit negotiations.
In the wake of Johnson's comments, the British pound traded at
$1.2965, down from $1.3078 Thursday in New York.
(END) Dow Jones Newswires
September 23, 2016 12:44 ET (16:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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