By Sara Sjolin and Carla Mozee, MarketWatch
Casino shares slide after earnings; Britvic upgraded
European stocks leapt to a one-week high Thursday after the
European Central Bank offered a brighter assessment of economic
growth in the eurozone, and as the euro retreated from intraday
gains.
How did markets perform?
The Stoxx Europe 600 index climbed 1.1% to 376.62, the best
close since Feb. 28, FactSet data showed. All sectors rose, led by
the consumer-goods group.
France's CAC 40 index surged 1.3% to 5,254.10, its highest close
since Feb. 7. Germany's DAX 30 index finished up 0.9% at
12,355.57.
Italy's FTSE MIB tacked on 1.2% to 22,731.10, and the U.K.'s
FTSE 100 index rose 0.6% to end at 7,203.24.
The euro dropped to $1.2314 from $1.2411 late Wednesday in New
York.
The yield on the 10-year German bund fell 3 basis points to
0.625%, according to Tradeweb, as prices rose.
What was driving the market?
Stocks ran higher during afternoon trade as investors yanked the
euro from its intraday high of $1.2447 against the U.S. dollar.
Shares of European exporters can be hurt when the euro rises, as
euro strength can reduce revenue made overseas by such
companies.
The euro retreated as ECB President Mario Draghi, at a Frankfurt
press conference, emphasized more dovish elements of the bank's
monetary policy statement issued Thursday, including a commitment
to maintaining rates at present and low levels if warranted. The
euro's fall paved the way for stocks to scramble higher.
The euro had earlier climbed, and stocks dropped, after the ECB
gave up its pledge to expand or extend quantitative easing if the
economic outlook deteriorated. 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 were waiting to see if the rate setters would remove
that particular bit, as it could indicate the end of QE is moving
closer.
Draghi said economic growth in the eurozone is improving faster
than the bank had anticipated, leading it to nudge up its 2018
growth forecast to 2.4% from 2.3%. It slightly reduced its 2019
inflation forecast to 1.7% from 1.9%.
The ECB left its refinancing rate at 0%
(http://www.marketwatch.com/story/european-central-bank-leaves-rates-policy-statement-unchanged-2018-03-08).
The ECB also reiterated that the current EUR30-billion-a-month
stimulus program will "run until the end of September 2018, or
beyond, if necessary."
European stocks had opened in positive territory as tensions
over planned U.S. tariffs on steel and aluminum imports eased after
the White House indicated that major trading partners Canada and
Mexico could be exempt. U.S. 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).
What strategists are saying
"Today's marginally hawkish concession from the ECB has been
overshadowed by a marginally negative revision to their inflation
forecasts today, with the DAX hitting the highest level in a week
in response," Joshua Mahony, a market analyst at IG, wrote in
emailed comments.
"Talk of greater available slack and the clear easing of
inflation pressures has taken the pressure off the committee to
act, and with a typically dovish Mario Draghi allowed to maintain
an accommodative stance going forward, today is clearly a case of
taking with one hand and giving with the other," he wrote.
Which stocks were in focus?
Actividades de Construccion y Servicios SA (ACS.MC) rallied 7.8%
after Atlantia SpA(ATL.MI) said it and ACS have discussed making a
joint offer
(http://www.marketwatch.com/story/atlantia-acs-discuss-making-joint-bid-for-abertis-2018-03-08)
for Spanish infrastructure firm Abertis Infraestructuras SA
(ABE.MC) , confirming Spanish media reports.
JCDecaux SA (DEC.FR) slid 3% 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 3.7% 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 6.9% 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.
Britvic PLC (BVIC.LN) jumped 6.2% after Morgan Stanley upgraded
the soft drinks maker's rating to overweight from equalweight.
"After a material pull-back YTD, Britvic's current share price
offers an attractive entry point," said analyst Richard Felton in a
research note.
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 12:31 ET (17:31 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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