By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stocks closed near record
levels on Wednesday, with peripheral euro-zone markets such as
Portugal and Spain continuing to rise as borrowing costs fell in
those countries. Investors were waiting for the minutes of the
latest U.S. Federal Reserve meeting and weighing regional data
ahead of an upcoming European Central Bank meeting.
The Stoxx Europe 600 index rose 0.1% to close at 329.75, its
highest closing value since May 19, 2008, not far from its closing
level on Tuesday of 329.40. The move was driven by upbeat German
unemployment data and falling European borrowing costs, which were
reflected in bond prices.
Among stocks on the move, shares of Akzo Nobel NV closed down
2.7% after the Dutch painting and chemicals company said it would
continue to cut costs in 2014 and kept its outlook for 2013.
Shares of Air France-KLM SA rose 7.3% after the airline reported
a rise in passenger traffic of 2.1% and a load factor rise of 0.9
points. The unit revenue per available seat-kilometer was
"resilient," the company said.
European stocks got a few pieces of data on Wednesday. Retail
sales for the euro zone rose at the fastest pace in 12 years during
November, lifting hopes for a revival in domestic demand. The sales
jump came as a surprise as the euro zone's unemployment rate stayed
stubbornly high in November, unchanged at 12.1%.
Other data showed German manufacturing orders surging in
November amid a glut of bulk orders.
The data come ahead of a monthly meeting of the European Central
Bank on Thursday. Some had been speculating that ECB President
Mario Draghi may have to take a dovish tone, given that the
single-currency zone saw another inflation decline on Tuesday. The
Bank of England's Monetary Policy Committee will also announce a
rate decision on Thursday. Neither bank is expected to make a
change in key rates.
The rally for European stocks on Tuesday was fueled by upbeat
German employment numbers and falling borrowing costs across
Europe's periphery, which helped lift the Spain IBEX 35 index to
its best level since mid-2011 on falling bond yields.
The IBEX added 0.7% on Wednesday, driven by a 0.7% rise for BBVA
SA as the yield on the 10-year bond fell to 3.77%, reportedly
marking fresh four-year lows. The government announced plans to
issue more debt in 2014, though that failed to rattle the
market.
Portugal's PSI 20 jumped 1.4% to close at 7,055.27, led by a
2.7% rise for Banco Comercial Português SA . Yields for Portugal's
10-year bond , which had earlier in the day been down, rose
slightly to 5.38%.
Among other indexes, the German DAX 30 index fell 0.1% to close
at 9,497.84 and the French CAC 40 index was off less than 0.1% to
close at 4,260.96.
The U.K.'s FTSE 100 index fell 0.5% to close at 6,721.78.
Among the heavyweights, shares of British American Tobacco PLC
fell 1%.
Away from the main indexes, shares of Mothercare PLC tumbled 31%
after a profit warning. The international mother-and-baby goods
retailer said world-wide network sales fell 4.4% in the 12 weeks to
Jan. 4, and full-year profits will likely be below the current
range of market expectations.
Wall Street stocks were mixed as investors took in data
suggesting that the labor market improvement is picking up pace.
Still to come are minutes of the Fed meeting of Dec. 18
meeting.
More stories from MarketWatch:
Euro-zone retail sales rise is fastest in 12 years
German manufacturing orders surge in November
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