By Carla Mozee, MarketWatch
Steinhoff to restate results; EU leaders gather in Brussels
European stocks pared deeper losses Thursday, as the euro turned
lower in the wake of the European Central Bank issuing updated
inflation targets as policy makers wrapped up for the year.
Stocks largely struggled throughout the session even after data
showed eurozone business activity revved up this month.
Read:MarketWatch's recap of the ECB press conference
(http://blogs.marketwatch.com/thetell/2017/12/14/watch-here-for-ecb-hints-to-the-unwinding-of-qe-live-blog/)
How markets are moving: The Stoxx Europe 600 index fell 0.2% to
390.10, but it had dropped by as much as 0.4% earlier in the
session. The oil and gas sector, as well as basic materials joined
telecoms in moving higher. Utility and health care shares fell the
most. On Wednesday, the benchmark slipped 0.2%
(http://www.marketwatch.com/story/european-stocks-step-back-from-highest-in-5-weeks-but-retailers-gain-ground-2017-12-13),
from its highest close since Nov. 8.
Germany's DAX 30 index was off 0.1% at 13,141.27, and France's
CAC 40 fell 0.3% to 5,383.44.
Spain's IBEX 35 lost 0.4% to 10,215.50. In London, the FTSE 100
gave up 0.1% at 7,496.51
(http://www.marketwatch.com/story/ftse-100-drops-after-may-loses-key-brexit-vote-boe-decision-ahead-2017-12-14).
The euro
(http://www.marketwatch.com/story/dollar-index-lingers-around-1-week-low-as-central-banks-take-center-stage-2017-12-14)
fell to $1.1781 from $1.1827 on Wednesday, when it leapt 0.7%
against the greenback after the Federal Reserve suggested U.S.
inflation will continue to be sluggish in 2018. Read:
In the bond market, the yield on Germany's 10-year government
bond rose 2 basis points to 0.326%. Yields rise when prices
fall.
See: Inflation outlook still baffles the Fed
(http://www.marketwatch.com/story/inflation-outlook-still-baffles-the-fed-2017-12-13)
And check out: What European stock-market sector looks good in
2018?
(http://www.marketwatch.com/story/what-stock-market-sector-looks-good-in-2018-think-planes-trains-and-automobiles-2017-12-11)
What's moving markets: The European Central Bank left its
monetary policy unchanged
(http://www.marketwatch.com/story/ecb-leaves-rates-at-record-low-reiterates-dovish-guidance-2017-12-14),
as widely anticipated. Losses for European stocks accelerated
during ECB President Mario Draghi's press conference as the euro
hit an intraday high of $1.1864. European exporters can be hurt by
currency strength as it can reduced sales made to their customers
overseas.
But equities came off session lows as the euro began to drop
following inflation projections from the ECB's staff and strength
in the U.S. dollar. The 2020 forecast of 1.7% was slightly behind
some expectations of 1.8%, which could have suggested the bank
would raised interest rates in the first half of 2019.
European bank stocks were mostly lower, pulling the Stoxx Europe
600 Bank Index down 0.4%. There, France's Societe Generale SA
(GLE.FR) shed 0.6% and Deutsche Bank AG (DBK.XE) fell 0.2% as did
Spain's BBVA (BBVA). But Banco Santander SA (SAN) was up 0.2%.
The euro earlier Thursday extended gains after figures showed
strong factory output and an upturn in the services sector
bolstered business activity in the eurozone in December
(http://www.marketwatch.com/story/eurozone-business-activity-at-its-strongest-since-2011-ihs-markit-2017-12-14).
Also Thursday, the Bank of England held its key rate at 0.5%, as
expected. The Swiss National Bank on Thursday held its deposit rate
at minus 0.75%, meeting expectations.
Brexit in Brussels: Meanwhile, Brexit was a major focus after
U.K. Prime Minister Theresa May's government late Wednesday was
defeated in a key parliamentary vote on legislation for the U.K.
divorce from the EU.
The setback for the government comes just as EU leaders --
including May -- were meeting in Brussels through Friday for a
summit where Brexit will be high on the agenda. The group is
expected to give the green light for divorce talks to move onto the
second phase
(http://www.marketwatch.com/story/breakthrough-on-brexit-terms-opens-way-to-next-phase-of-talks-2017-12-08).
The U.K.'s lower house on Wednesday voted to amend the Brexit
bill to give members of parliament the power to reject the final
divorce deal struck with Brussels. The government had warned that
the measure could jeopardize a smooth exit from the EU in March
2019.
The vote -- which was an amendment to May's flagship Brexit bill
-- came after a rebellion of 11 members of her own Conservative
Party, and is seen as a potential route to a softer Brexit.
The pound had slipped after the vote
(http://www.marketwatch.com/story/british-pound-slips-as-uk-parliament-votes-to-change-brexit-plan-2017-12-13)
on Wednesday.
Stock movers: Capita PLC (CPI.LN) tumbled 11% as the
London-based business and outsourcing services company said its bid
pipeline is currently valued at GBP2.5 billion, but that the bids
are unlikely to add to profit in 2018 if successful.
(http://www.marketwatch.com/story/capita-sees-2017-in-line-bids-wont-add-to-profit-2017-12-14)
Steinhoff International Holdings NV slid 13% after the owner of
Poundland and Mattress Firm said it will restate its 2016 financial
results
(http://www.marketwatch.com/story/steinhoff-to-restate-2016-financial-results-2017-12-14-24853710)
as part of its scrutiny into its European segment's 2017 balance
sheet assets.
Sky PLC (SKY.LN) fell 1.7% after the broadcaster's largest
shareholder, 21st Century Fox Inc. (FOX), agreed to sell most of
its assets to Walt Disney Co. (DIS) in a deal that valued at about
$52.4 billion
(http://www.marketwatch.com/story/disney-to-buy-21st-century-fox-in-a-deal-valued-at-524-billion-2017-12-14).
Denmark's Vestas Wind Systems AS (VWS.KO) jumped 6.4% and
Spain's Siemens Gamesa Renewable Energy SA (SGRE.MC) gained 4%
following reports that some Republican members of the U.S. Senate
are reconsidering the potential for cuts of renewable energy tax
credits.
Of the Stoxx 600, Lonmin PLC (LMI.LN) jumped 18% after the
platinum producer agreed to be purchased
(http://www.marketwatch.com/story/lonmin-agrees-to-takeover-by-sibanye-stillwater-2017-12-14)
by South Africa's Sibanye-Stillwater (SGL.JO) .
Economic data: IHS Markit said its December preliminary, or
flash, composite purchasing managers' index for the eurozone came
in at 58.0, the highest since February 2011, led by continued
improvement in France. The manufacturing PMI rose to a record of
60.6.
Black Friday events helped push U.K. retail sales up by 1.1% in
November
(http://www.marketwatch.com/story/black-friday-helps-boost-uk-retail-sales-2017-12-14),
well above the 0.4% increase expected in a FactSet survey of
analysts.
(END) Dow Jones Newswires
December 14, 2017 11:01 ET (16:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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