By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets were delicately
poised to post the first winning session in four on Wednesday
afternoon, with drugmakers and banks helping out, but sentiment was
dogged by weak euro-zone sales and renewed selling on Wall
Street.
Investors were looking ahead to Thursday's European Central Bank
meeting and expectations of another cut in the repo rate.
The Stoxx Europe 600 index bounced around in the afternoon, last
moving up 0.2% to 318.34, as the market attempted to rebound after
a week that has already seen the index lose 1.3%.
Among notable movers, shares of Swatch Group AG jumped 4.2%
after the watchmaker reported better-than-expected full-year
earnings for 2013 and forecast a rebound in demand from China.
GlaxoSmithKline rose 1.2%, giving a boost to the main Europe
index and the FTSE 100 index after the drug maker posted a
full-year sales gain after two years of falling revenue.
Swedish engineering firm Alfa Laval AB rallied 5.6% after
reporting a 16% rise in order intake and a 9% improvement in net
sales in the fourth quarter.
On a more downbeat note, shares of Syngenta AG lost 3.5% after
the seed and chemical firm said profit dropped in 2013.
More broadly, European indexes shed earlier gains in the
afternoon after the ADP employment data for the U.S. showed 175,000
private-sector jobs were added to the economy in January and Wall
Street appeared to give up on a rally that began on Tuesday.
Economists surveyed by Bloomberg had expected a reading of
185,000.
The data came ahead of the closely watched nonfarm-payrolls
report out on Friday, which is expected to show 190,000 new jobs
were added to the economy in January and that the unemployment rate
dropped to 6.6%, according to a MarketWatch poll.
In Europe, data for Spain showed activity in the country's
services sector increased at the fastest pace in six-and-a-half
years in January, with the first rise in employment since February
2008. The IBEX 35 index , got little joy from that, easing 0.1% to
9,741.10.
Other data showed retail sales data for the euro zone coming in
much weaker than expected, which took some shine off markets
earlier in the day. Retail sales fell 1.6% in the euro zone in
December and November sales were revised sharply lower, to a gain
of 0.9% from a prior 1.4% rise. German retail sales suffered the
biggest drop of the region with a 2.4% fall.
Analysts at Danske Bank said the data would give the European
Central Bank something to think about at Thursday's meeting and
they expect the refinancing rate will be cut to 0.1%.
"It previously seemed there was an upside risk to our forecast
for private consumption, but with the latest decline and the
revision, this does not seem to be the case any longer," said
analysts at Dankse Bank in a note.
Germany's DAX 30 index was underperforming the rest of Europe
with a 0.2% drop to 9,111.68. ThyssenKrupp AG added pressure in
Frankfurt, off 0.5%, after HSBC cut the industrial conglomerate to
underweight from neutral. Continental AG was down nearly 3%.
Elsewhere, France's CAC 40 index was flat at 4,119.73, and the
U.K.'s FTSE 100 index was flat at 6,455.27.
ArcelorMittal SA climbed 1.3% in Paris after HSBC lifted the
steelmaker to overweight from neutral.
Greek stocks outperformed the rest of Europe, with the ASE
Composite index jumping 2.2% after Bloomberg News reported that the
next bailout for Greece could including a maturity on bonds that
extends to 50 years and cutting the interest rate on some previous
aid by 50 basis points. Bloomberg cited European Union sources.
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