By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets showed mixed
moves on Friday, with investors focusing on the earnings season in
the U.S. and worries that higher-than-expected inflation data from
China will limit monetary easing.
The Stoxx Europe 600 index was off 0.4% at 286.42, on track for
a 0.5% weekly loss. On the year, however, it was still up 2.4%.
"The markets have had a New Year euphoria rally, but whether it
can sustain it is to be questioned. No one actually wants to take
any further positions ahead of the weekend," said Justin Urquhart
Stewart, co-founder of Seven Investment Management.
"The one thing that has returned to the market is confidence.
The market always wants to go up, but couldn't do it because of
uncertainty. Now that we have gotten past the fiscal fudge in the
U.S. and we see better news globally there are reasons to move
forward," he said.
Among notable movers in the pan-European index, some drug makers
were on the rise, after UBS upgraded the pharmaceutical sector to
overweight from neutral and highlighted it as its preferred
defensive play.
Shares of Roche Holdings AG gained 1% and Novo Nordisk AS (NVO)
moved 0.5% higher.
International Consolidated Airlines Group SA jumped 4.4%, as UBS
lifted the British Airline-parent to buy from neutral.
Pointing in the other direction, shares of Getinge AB tanked
8.6%. The Swedish medical-equipment firm said demand for its
products weakened during the final quarter of 2012, making net
profit before taxes for the full year fall short of
expectations.
Investors also trained their attention on the U.S. earnings
season, which kicked off earlier this week with encouraging results
from aluminum firm Alcoa Inc. (AA). Friday's results from Wells
Fargo & Co. (WFC), the first major U.S. bank to report, beat
expectations, although its closely watched interest margins
declined more than expected.
U.S. stocks traded mostly lower on Wall Street.
Japan was also in focus after the government approved a 10.3
trillion yen ($116 billion) stimulus package aimed at boosting GDP
growth by 2 percentage points and creating 600,000 jobs.
Data from China, however, countered any lift in sentiment from
Japan's efforts. Consumer prices rose to a seven-month high in
December, stoking fears that additional stimulus measures are off
the table. The consumer-price index climbed 2.5%, with food prices
jumped 4.2%.
Mining companies, which are sensitive to growth in China,
dropped on the news, with shares of BHP Billiton PLC (BHP) down
2.7%, Rio Tinto PLC (RIO) off 1.7% and Anglo American PLC dropping
1.8%.
Also in London, shares of insurer Aviva PLC rose 3.1%. Citigroup
lifted the firm to buy from neutral, saying it is one of the most
attractive opportunities in the sector.
On the data front in the U.K., a report on manufacturing
production for November showed a 0.3% decline, missing analyst
expectations of a 0.5% increase.
The U.K.'s FTSE 100 index , however, traded 0.1% higher at
6,106.16, with shares of Barclays PLC (BCS) up 1.3%.
Germany's DAX 30 index dropped 0.2% to 7,697.31, with shares of
Deutsche Lufthansa AG of 2.1%, after UBS downgraded the airline to
neutral from buy.
Shares of Volkswagen AG rose 1.4%. The car maker its passenger
cars brand reached a new sales record in 2012, supported by demand
for its new Golf model.
And in France, shares of Electricite de France SA lost 2.1%,
after Credit Suisse cut the stock to underperform from neutral,
citing weakening earnings and cash flows.
The CAC 40 index gave up 0.3% to 3,690.89.
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