EUROPE MARKETS: European Stocks Threaten To Snap Win Streak, With Draghi On Deck
April 27 2017 - 07:35AM
Dow Jones News
By Carla Mozee, MarketWatch
Deutsche Bank shares fall despite doubling in profit
European stocks fell Thursday for the first time in seven
sessions, with Deutsche Bank AG shares falling despite a leap in
profit, as investors awaited monetary-policy details from European
Central Bank President Mario Draghi.
The Stoxx Europe 600 fell 0.3% to 387.53, but the tech, utility
and health care sectors turned higher. The index on Wednesday
(http://www.marketwatch.com/story/european-stocks-struggle-to-hold-onto-20-month-high-ahead-of-trump-tax-unveiling-2017-04-26)
rose 0.5%, ending at the highest level since August 2015.
Stocks held to losses while the euro edged down to $1.0885 from
$1.0901, after the ECB said it made no changes to interest rates
(http://www.marketwatch.com/story/ecb-leaves-rates-unchanged-reiterates-asset-purchase-plans-2017-04-27),
as expected, and repeated that it could increase the size or
lengthen the duration of its asset-buying program if inflation
looks set to fall far back below its target of near but just below
2%.
Draghi will hold a news conference at 2:30 p.m. Frankfurt time,
or 8:30 a.m. Eastern.
The march of earnings reports continued Thursday. Deutsche Bank
(DBK.XE) (DBK.XE) shares dropped 2.8% after the German lending
heavyweight's profit doubled in the first quarter, but revenue came
in roughly flat
(http://www.marketwatch.com/story/deutsche-bank-profit-more-than-doubles-2017-04-27-24851353)
when adjusted for the impact of credit spreads.
European stocks were lower following the unveiling of U.S.
President Donald Trump's plan for tax cuts and changes
(http://www.marketwatch.com/story/markets-got-what-was-broadly-expected-from-tax-plan-a-starting-point-2017-04-26),
with some analysts saying the outline lacked detail. U.S. stocks
shifted lower after the tax announcement.
Opinion:Trump's tax plan sets the stage for Dow 30,000, says
Nigam Arora
(http://www.marketwatch.com/story/trumps-tax-plan-sets-the-stage-for-dow-30000-2017-04-26)
ECB meeting: Draghi will speak more about monetary policy for
the eurozone. The central bank wasn't expected to make major
changes ahead of the final round of voting in the French
presidential election, set for May 7. In addition, Draghi has said
there's yet to be evidence of a durable rise in eurozone
inflation.
"Overall, we expect Draghi to remain restrained in this meeting,
after all, the risks to inflation--CPI dipped in March -- are still
tilted to the downside and this could be one reason to delay
tapering," said Kathleen Brooks, research director at City Index,
in a note.
Read: French election relief lays ground for ECB tapering -- but
not yet
(http://www.marketwatch.com/story/french-election-relief-could-pave-way-for-ecb-tapering-but-not-yet-2017-04-25)
Troubles in the Italian banking sector may be another reason the
ECB will hold off tapering, said Brooks.
"If the ECB reduces the amount of liquidity in the European
financial system too quickly then it is hard to see how these banks
can recapitalize themselves, and avoid selling off some of their
bad debts at a book value so low that it hits their capital
position," she said.
Stock movers: Deutsche Lufthansa AG (LHA.XE) shares slumped 4.3%
after the airline group swung to a first-quarter operating profit
(http://www.marketwatch.com/story/lufthansa-swings-to-profit-as-sales-jump-2017-04-27)
of 25 million euros ($27.3 million). The airline group earlier this
month said ticket pricing was more positive on a currency adjusted
basis.
Bayer AG (BAYN.XE) shares were up 3.8% after the German
pharmaceuticals and chemicals maker reported a 38% jump in net
profit
(http://www.marketwatch.com/story/bayer-profit-up-38-on-plastics-lifts-outlook-2017-04-27)
for the first quarter and raised its outlook for the full year.
WPP PLC shares (WPP.LN) fell 1.9% after the world's largest
advertising company said revenue growth slowed in the first quarter
as clients spent less in the U.S. and emerging markets
(http://www.marketwatch.com/story/wpp-revenue-growth-lags-as-us-clients-spend-less-2017-04-27).
BBVA (BBVA) shares were down 2.8% after the Spanish lender said
first-quarter net interest came in at EUR4.32 billion
(http://www.marketwatch.com/story/bbva-profit-rises-beating-views-2017-04-27),
slightly below a FactSet consensus estimate of EUR4.35 billion.
Individual indexes: Germany's DAX 30 fell 0.1% to 12,456.31.
France's CAC 40 lost 0.4% at 5,268.93.
The U.K.'s FTSE 100 gave up 0.5% at 7,249.39
(http://www.marketwatch.com/story/ftse-100-set-for-first-loss-in-four-days-but-lloyds-climbs-after-earnings-2017-04-27).
(END) Dow Jones Newswires
April 27, 2017 08:20 ET (12:20 GMT)
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