EUROPE MARKETS: European Stock Gains Limited As Auto, Mining Shares Fall; Draghi On Deck
May 24 2017 - 05:07AM
Dow Jones News
By Carla Mozee, MarketWatch
Draghi to speak in Madrid
Most major European markets ebbed lower, with automobile makers
Daimler AG and Fiat Chrysler Automobiles and mining stocks among
those struggling, while investors were preparing to hear from
European Central Bank and Federal Reserve officials.
Among benchmarks, Germany's DAX was off 0.2% at 12,635.38 and
Italy's FTSE MIB declined 0.3% to 21,345.75.
But the Stoxx Europe 600 latched onto a rise of 0.1% at 392.55,
aided by a flip higher for most U.K. blue-chips that nudged the
FTSE 100 up 0.2% at 7,499.38.
On a sector basis in Europe, utility, basic material and
consumer goods shares were in the red, but health care, technology
and telecom stocks were among those advancing.
Investors entered Wednesday's session with a downgrade of
China's credit rating at Moody's for the first time in nearly 30
years
(http://www.marketwatch.com/story/moodys-downgrades-china-rating-for-the-first-time-in-nearly-30-years-2017-05-24),
to A1 from Aa3. Moody's cited concerns about the impact that rising
levels of debt will have on the world's second-largest economy,
which is a major buyer of industrial and precious metals.
Mining shares were lower, with Fresnillo PLC (FRES.LN) down
1.8%, iron ore heavyweight Rio Tinto PLC (RIO) (RIO) (RIO) off
1.6%. Boliden AB (BOL.SK) was losing 0.7% and Norwegian aluminum
company Norsk Hydro ASA (NHYDY) gave up 1.3%.
Along with China on the radar will be European Central Bank
President Mario Draghi, who's due to speak at Banco de Espana in
Madrid at 2:45 p.m. local time. He'll appear a day after eurozone
PMIs showed economic activity remained at a six-year high. It also
comes at a time that the euro has marched to six-month highs
against the dollar.
"While the European Central Bank is in no position to raise
rates, President Draghi [has] acknowledged the improvements in the
economy and the reduction in downside risks," Kathy Lien, managing
director of FX strategy at BK Asset Management wrote earlier this
week.
But "the ECB won't be happy with the recent climb in the euro
... and these gains will ease inflation as well as growth," she
said.
The euro was buying $1.1181, little changed from $1.1184 late
Tuesday in New York. The currency pair will also be in focus when
the Federal Reserve released the minutes from its most recent
meeting after European trading closes Wednesday.
Read:Fed minutes may quell doubt about a June interest-rate hike
(http://www.marketwatch.com/story/fed-minutes-may-quell-fresh-doubts-about-a-june-rate-hike-2017-05-19)
Stock movers: Daimler AG (DAI.XE) fell 2.2%, leading decliners
on the DAX, after German authorities raided the company's Stuttgart
headquarters
(http://www.marketwatch.com/story/daimler-offices-raided-in-diesel-emissions-probe-2017-05-23)and
other sites to secure evidence in their investigation in possible
diesel-emissions fraud by the car maker. Prosecutors said on
Tuesday the offices were raided.
Fiat AG (FCA.MI) fell 0.9%, with the car maker late Tuesday
saying it was "disappointed" the U.S. Justice Department filed a
complaint
(http://www.marketwatch.com/story/fiat-chrysler-chafes-against-claims-of-diesel-emissions-cheat-shares-fall-2017-05-23)
against the company related to allegations it used software to
cheat diesel-emission tests.
Kingfisher PLC shares (KGF.LN) fell 6.5% after the parent of
home improvement stores B&Q and Castorama said first-quarter
comparable sales fell 0.6%
(http://www.marketwatch.com/story/kingfisher-quarterly-same-store-sales-decline-2017-05-24)
on weak sales in France and disruption caused by a company
overhaul.
Glencore PLC (GLEN.LN) was down 0.7%. The miner said it "made an
informal approach to Bunge
(http://www.marketwatch.com/story/glencore-makes-takeover-approach-to-bunge-2017-05-24)...regarding
a possible consensual business combination." A deal with grain
maker Bunge Ltd. (BG) could make Glencore a major force in the U.S.
agriculture market.
(END) Dow Jones Newswires
May 24, 2017 05:52 ET (09:52 GMT)
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