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)

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