EUROPE MARKETS: European Stocks Cling To 11-month High As Bank Shares Take A Breather
December 09 2016 - 4:28AM
Dow Jones News
By Carla Mozee, MarketWatch
Fyffes shares shoot up after Sumitomo bid
Stocks across Europe held to thin gains Friday, as bank shares
pulled back from a rally spurred by the European Central Bank's
decision to continue its stimulus efforts.
The Stoxx Europe 600 index was up 0.2% at 352.76, but losses
were seen among financial , utility and industrial shares.
On Thursday, the pan-European benchmark leapt 1.2%
(http://www.marketwatch.com/story/european-stocks-edge-higher-as-ecb-decision-looms-2016-12-08)
to an 11-month high, for its fourth win in a row. For the week, the
Stoxx 600 looks set to pile on 4%, which would mark its best weekly
performance since mid-February.
Banks fall back: Within the financial sector, bank shares were
under pressure, pulling the Stoxx Europe 600 Bank Index down by
0.7%.
Among the biggest decliners, Italy's Banca Popolare di Milano
(PMI.MI) fell 3%, and Banco Popolare Societa Cooperativa (BP.MI)
lost 2.7%. Spain's Bankia SA (BKIA.MC) was 2.9% lower, and Deutsche
Bank AG (DBK.XE) shed 1.3%.
The bank sector rose Thursday after the ECB said it will
continue to buy government bonds within the eurozone through
December 2017, but scaled back the purchase amount to EUR60 billion
a month, starting in April. The ECB currently buys EUR80 billion in
bonds a month.
"The outlook for the eurozone remains weak, as underlined by the
expansion of the scale of the QE program, and the fact that we've
seen the end-date pushed out to December 2017," said Tony Cross,
market analyst at TopTradr, in a note.
The Stoxx Europe 600 Bank Index is on track early Friday for a
weekly surge of 9%.
German exporters: Germany's exporter-heavy DAX 30 equity index
was pushed to its highest this year on Thursday, above 11,000. The
index on Friday was off 0.1% at 11,167.22.
German stocks benefitted from a slide in the euro after the ECB
decision. On Friday, the shared currency was buying $1.0617,
compared with $1.0602 late Thursday in New York.
For the euro, it's "really a case of waiting for next week's
[Federal Reserve] verdict now and although we're still some
considerable way from parity ... if Janet Yellen paints a hawkish
picture for 2017 then further losses here should be anticipated,"
Cross wrote.
U.S. Federal Reserve policy makers, including Chairwoman Janet
Yellen, will meet December 13 to 14.
Movers: Electrolux AB shares (ELUXY) rose 3% after the appliance
maker said it expects moderate growth in its largest markets
(http://www.marketwatch.com/story/electrolux-warns-on-drop-in-latin-american-demand-2016-12-09)of
Europe and North America next year. But it also warned that
continued economic pressures in Latin America will see demand there
fall by around 5%.
Gemalto NV shares (GTO.AE) climbed 6.7%. The digital security
firm is buying 3M Co.'s (MMM) identity-management business for $850
million
(http://www.marketwatch.com/story/gemalto-to-buy-3ms-id-management-business-2016-12-09),
3M said Thursday.
Off the main index, shares of Fyffes PLC (FQ3.DB) rallied 49%
after Dublin-based banana distributor said it's being purchased by
Japan's Sumitomo Corp. (8053.TO) for EUR751.4 million.
Indexes: Italy's FTSE MIB index fell 1.1%, but was on track for a nearly 7% jump for the week.
The gains came after Italian bank shares rose on the prospect
that a rescue plan is being crafted for troubled lenders. The FTSE
Italia All-Share Bank Index was down 2.8% Friday, but was on course
for a 12% weekly climb.
Italian assets have been in focus this week after voters
rejected Prime Minister Matteo Renzi's plans for constitutional
reform. Renzi submitted his resignation after the defeat, but has
been asked to stay on in a caretaker role, media reports said.
France's CAC 40 rose 0.1% to 4,741.67, and Spain's IBEX 35 shed
0.4% at 9,106.80. The U.K.'s FTSE 100 picked up 0.1% at
6,939.80.
(END) Dow Jones Newswires
December 09, 2016 05:13 ET (10:13 GMT)
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