By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Europe's benchmark stock index moved
lower on Wednesday, pulling back after its biggest rally in eight
months, as investors focused on a raft of economic-data releases
from the euro zone and the U.S.
The Stoxx Europe 600 index slipped 0.2% to 336.58, after jumping
2.1% on Tuesday. The move was the largest one-day percentage gain
since early July, triggered by easing tensions between Russia and
Ukraine after Russian troops were called back to their bases and
President Vladimir Putin stressed he wouldn't use military force
just now.
Among major movers in Wednesday's trade, shares of Subsea 7 SA
dropped 6.2% after the offshore-engineering firm said earnings per
share fell more than 40% in the fourth quarter.
Shares of Melrose Industries PLC dropped 7.1% after the
investment company reported a rise in full-year adjusted pretax
profit, but says it faces headwinds from the current strength of
the pound.
On a more upbeat note, shares of Carrefour SA advanced 1.8%
after the French supermarkets giant said operating profit grew 5.4%
last year.
Euro-zone economic data
More broadly, investors focused on fresh data on the euro zone.
Eurostat, the statistical office of the European Union, said retail
sales in January jumped a better-than-expected 1.6% in the currency
union compared with December, fueled by a solid increase in the
nonfood sector. A second estimate on GDP growth confirmed the
euro-zone economy expanded by 0.3% in the fourth quarter.
Additionally, the purchasing managers index for the euro bloc
showed its economy grew faster than estimated in February, sending
the composite PMI to the highest level since June 2011.
In the U.K., the Markit/CIPS services PMI for February came in
at 58.2, exceeding analyst expectations, but slipping from the 58.3
recorded in January.
In the afternoon, the U.S. ADP jobs report is likely to be
watched for any clues on how strong February nonfarm payrolls have
been ahead of the data release on Friday. U.S. stock futures
pointed to a slightly lower open on Wall Street.
Among country-specific indexes in Europe, the U.K.'s FTSE 100
index lost 0.4% to 6,793.61, while Germany's DAX 30 index fell 0.4%
to 9,553.43. France's CAC 40 index dropped 0.4% to 4,379.85.
Ukraine-Russia standoff
Investors also watched for developments in the Ukraine-Russia
standoff, with Nato and Russia expected to discuss the latest
developments at a special meeting on Wednesday. Nato said on
Tuesday it continued to support a peaceful solution to the crisis,
but that Russia is violating "Ukraine's sovereignty and territorial
integrity."
Analysts at UBS said markets shouldn't underestimate what's at
stake and that the "risk premia in financial assets certainly do
not seem excessive." The situation is a "bad advertisement" for
emerging markets at a sensitive time, they said, and the
consequence could be redemption pressures on emerging-market bond
funds.
"If the situation in Ukraine fails to de-escalate, we believe
flow pressure on EM funds could impact markets such as Hungary,
South Africa and Turkey, which have minimal economic linkages with
Russia and Ukraine," they said.
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