EUROPE MARKETS: European Stocks Rebound After Longest Losing Streak In A Year
16 November 2017 - 9:48PM
Dow Jones News
By Sara Sjolin, MarketWatch
U.K. retail sales decline, but beat views
European stocks were on track to break their longest losing run
in a year on Thursday, with major regional indexes rebounding on
the back of well-received corporate updates. Investors also cheered
a rise in shares of car makers after the release of encouraging EU
sales figures.
What are markets doing: The Stoxx Europe 600 index rose 0.5% to
383.81, on track to break a seven-session streak of declines.
Germany's DAX 30 index added 0.6% to 13,047.21, while France's
CAC 40 index gained 0.6% to 5,332.25. The U.K.'s FTSE 100 index was
flat at 7,372.68.
The euro traded at $1.1778, down from $1.1791 late Wednesday in
New York.
What is driving the markets: Traders have put the recent selloff
on pause as they assess the latest round of corporate updates,
which are helping boost shares in the likes of Bouygues, British
Land and 3i Group.
Auto maker stocks were also on the rise after data showed new
car sales in the EU grew strongly
(http://www.marketwatch.com/story/eu-new-car-registrations-return-to-growth-2017-11-16-24852759)
in October, rebounding after a dip in September. The Stoxx Europe
Automobiles & Parts Index climbed 0.9%.
Meanwhile, investors are monitoring the prospects for U.S. tax
reforms out of Washington, which moved into focus after the Senate
Finance Committee unveiled major changes to its tax legislation
earlier in the week. The first Republican senator to come out
against the tax plan emerged Wednesday. That added to fears the tax
reforms will suffer the same fate as the Trump administration's
health care reform legislation, which failed to get sufficient
backing to move forward.
Stock movers: Bouygues SA (EN.FR) climbed 4.3%. The French
industrial conglomerate said its nine-month net profit more than
doubled
(http://www.marketwatch.com/story/bouygues-shares-rise-on-higher-profit-guidance-2017-11-16),
buoyed by an increased contribution from its shareholding in Alstom
SA (ALO.FR) .
Shares of 3i Group PLC (III.LN) rose 2.3% after the
international investment manager said it is on track to deliver
another strong year of growth
(http://www.marketwatch.com/story/3i-says-on-track-for-strong-year-of-growth-2017-11-16)
in its private-equity portfolio.
British Land Co. PLC (BLND.LN) added 2.2% after the real-estate
company said it swung to a first-half profit
(http://www.marketwatch.com/story/british-land-swings-to-pretax-profit-2017-11-16).
Among car makers, Volkswagen AG (VOW.XE) (VOW.XE) rose 2.4%,
Fiat Chrysler Automobiles NV (FCA.MI) (FCA.MI) climbed 1.9% and
Renault SA (RNO.FR) gained 0.8%. In other Volkswagen news, the
Germany company said it and its Chinese joint-venture partners will
invest nearly $12 billion by 2025 in developing electric cars for
the market in China.
Shares of GKN PLC (GKN.LN) slid 7.8% after the engineering group
ousted its CEO designate Kevin Cummings amid problems at the
aerospace unit he ran.
Sodexo SA (SW.FR) slumped 3.8% after the French food service and
facilities management company offered disappointing guidance.
Economic news: U.K. retail sales dropped 0.3% in October on the
year, but still beat forecasts
(http://www.marketwatch.com/story/uk-retail-sales-rebound-beats-expectations-2017-11-16)
of a 0.5% decline, according to FactSet estimates. Month-on-month
sales rose 0.3%, beating the 0.1% forecast.
The pound turned higher after the data to buy $1.3181, up from
$1.3158 ahead of the report and $1.3170 late Wednesday in New
York.
Eurozone inflation was confirmed at 1.4% in October, down from
1.5% in September.
What are strategists saying: "The annual comparison [for U.K.
retail sales] suffered due to an especially strong October last
year, when growth peaked at 7.4%. However, the extent to which
annual sales growth has slipped from boom to decline over the
course of a year underscores the plight faced by retailers and the
degree to which households are being squeezed," said Chris
Williamson, chief business economist at IHS Markit, in a note.
"On a number of levels, major indices are starting to show signs
of fatigue, with both the Nikkei 225 and the German DAX in
particular looking quite vulnerable to further losses, with the DAX
briefly trading below its October lows yesterday before
rebounding," said Michael Hewson, chief market analyst at CMC
Markets UK, in a note.
"With concerns about high yield credit prompting some
profit-taking along with a recent survey that showed investors
underweight in cash, it wouldn't take much more of a push for
markets to fall even further as portfolio managers start to lock in
profits as we head towards year end," Hewson added.
(END) Dow Jones Newswires
November 16, 2017 05:33 ET (10:33 GMT)
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