EUROPE MARKETS: European Stocks Trim Gains After ECB Removes Easing Bias From Forward Guidance
March 08 2018 - 7:29AM
Dow Jones News
By Sara Sjolin, MarketWatch
Casino shares slide after earnings
European stocks pared gains on Thursday after the European
Central Bank kept interest rates at record lows, but turned more
hawkish in its forward guidance.
What are the markets doing?
The Stoxx Europe 600 index was up 0.2% at 373.30, after trading
as high as 374.10 ahead of the ECB statement.
Germany's DAX 30 index fell 0.3% to 12,204.34, while France's
CAC 40 index climbed 0.4% to 5,206.51.
The U.K.'s FTSE 100 index was up 0.1% at 7,166.26.
The euro erased its earlier loss after the ECB announcement,
swinging higher to buy as much as $1.2432 compared with $1.2411
late Wednesday in New York.
What is driving the market?
The jump in the euro and the pull back in equities came as the
ECB gave up its pledge to expand or extend quantitative easing if
the economy turned sour. In its closely watched policy statement,
the bank dropped the line that it would stand "ready to increase
the asset purchase programme (APP) in terms of size and/or
duration," if the economic outlook became "less favorable."
(https://twitter.com/RANsquawk/status/971729162053586945)
Traders had been waiting to see if the rate setters would remove
that particular bit, as it could indicate the end of QE is moving
closer. The ECB did, however, reiterate that the current
EUR30-billion-a-month stimulus program will "run until the end of
September 2018, or beyond, if necessary."
The ECB left its refinancing rate at 0%
(http://www.marketwatch.com/story/european-central-bank-leaves-rates-policy-statement-unchanged-2018-03-08),
while the rate paid on deposits parked overnight at the bank was
left at negative 0.4% and the rate on the deposit facility was left
at 0.25%.
Attention now turns to ECB President Mario Draghi's news
conference at 1:30 p.m. London time, or 8:30 a.m. Eastern Time.
Read:Here's the case for an unexpected tweak to the ECB's policy
guidance
(http://www.marketwatch.com/story/heres-the-case-for-an-unexpected-tweak-to-the-ecbs-policy-guidance-2018-03-07)
European stocks had opened in positive territory as tensions
over the planned U.S. tariffs on steel and aluminum imports eased
after comments from the White House that major trading partners
Canada and Mexico could be exempt. President Donald Trump is
expected to sign the tariff order on Thursday, with an announcement
planned for 3:30 p.m. Eastern Time, according to media reports
(http://www.marketwatch.com/story/trump-tariff-plan-expected-to-exempt-canada-mexico-after-house-republicans-protest-2018-03-08).
Which stocks are in focus?
Shares of JCDecaux SA (DEC.FR) slid 3.1% after the outdoor
advertising company said profit slumped 14% on 2017
(http://www.marketwatch.com/story/jcdecaux-profit-falls-14-in-2017-on-tax-charge-2018-03-08-14854617).
Casino Guichard-Perrachon SA (CO.FR) fell 5.2% after the French
retailer posted a sharp drop in 2017 profit
(http://www.marketwatch.com/story/casino-profit-slumps-in-2017-as-sales-tick-up-2018-03-08).
Shares of Hugo Boss AG (BOSS.XE) lost 6.3% even after the German
fashion company said it would raise its 2017 dividend
(http://www.marketwatch.com/story/hugo-boss-plans-to-raise-dividend-as-profit-rises-2018-03-08)
after net profit rose in the full year.
Aviva PLC (AV.LN) dropped 0.7% after reporting a 2% rise in 2017
adjusted operating profit
(http://www.marketwatch.com/story/aviva-profit-rises-2-in-2017-to-return-500-mln-2018-03-08).
What's new in economics?
German manufacturing orders fell more than expected
(http://www.marketwatch.com/story/german-manufacturing-orders-drop-miss-forecasts-2018-03-08)
in January, dropping 3.9%, compared with forecasts of a 1.5%
decline.
In France, the Bank of France said the country's economy is
likely to expand by 0.4% in the first quarter
(http://www.marketwatch.com/story/french-gdp-to-rise-04-on-quarter-bank-of-france-2018-03-08),
down from 0.6% in the fourth quarter of 2017.
(END) Dow Jones Newswires
March 08, 2018 08:14 ET (13:14 GMT)
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