By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets were mixed
Wednesday after posting solid gains the prior day, with investors
staying cautious ahead of confidence data from the euro zone and
minutes from the U.S. Federal Reserve.
The Stoxx Europe 600 index fell 0.1% to 289.86, retreating from
a 1.1% rally on Tuesday.
"This week we have the Italian election over the weekend and I
think there's 30%-40% chance of a market unfriendly outcome. That
would be bad for the euro and bad for Italian bonds. I think it
would be very wise to keep risk low over the weekend," said Nick
Beecroft, senior market analyst at Saxo Capital Markets in
London.
Shares of Royal KPN NV slumped 8.6%, as the Dutch telecom firm
said its largest shareholder, Mexico's America Movil (AMX), has
agreed to back a planned capital increase of 4 billion euros ($5.37
billion).
Shares of Akzo Nobel NV shaved off 3.3%. The Dutch paints and
coatings firm said it outlined new financial targets for 2015 after
posting a net loss for the fourth quarter.
For the broader European stock market, investors trained their
attention on U.S. data showing construction of new homes fell 8.5%
in January, although the release showed signs of longer-term
growth.
Meanwhile, the U.S.'s Producer Price Index rose a seasonally
adjusted 0.2% last month, below analysts' expectations.
U.S. stocks opened slightly lower on Wall Street.
Later in the day, attention turns to euro-zone consumer
confidence data and minutes from the January Federal Reserve
meeting.
"The December minutes were surprising as they revealed that a
majority of the [policy-making Federal Open Market Committee]
wanted to scale back asset purchases this year and potentially end
the purchase program before year-end," analysts at Danske Bank said
in a note. "The January minutes will therefore be scrutinized for
new information about the timing of an exit."
BOE minutes
In the U.K., the FTSE 100 index jumped above the 6,400 level for
the first time since January 2008, up 0.4%, after members at the
Bank of England appeared more willing to launch more quantitative
easing. Minutes from the bank's February policy meeting showed
three out of nine members called for a 25 billion pound ($38.6
billion) increase in the asset-purchase program, up from just one
member in January.
"The U.K. market being higher is surely due to the minutes,
because they were extremely dovish. You had three members voting
for GBP25 billion more quantitative easing and they repeated the
willingness to look through higher inflation for the next couple of
years," said Beecroft from Saxo Capital Markets.
"That means there could be more cheap money driving markets," he
added.
Oil firms were higher, tracking gains for oil prices. Shares of
BP PLC (BP) gained 0.6% and Royal Dutch Shell PLC (RDSB) added
1.1%.
Shares of heavyweight miner BHP Billiton PLC (BHP) fell 2.1%, as
the firm reported a 58% drop in half-year profit and said Chief
Executive Marius Kloppers will retire. .
Among other country-specific indexes in Europe, France's CAC 40
index lost 0.2% to 3,730.22.
Shares of Lafarge SA rallied 6.9%, after the cement maker
confirmed its plans to lower its debt level this year.
Additionally, the firm reported a 27% drop in full-year profit.
Cement makers were also on the rise in Germany, with shares of
HeidelbergCement AG up 3%.
Deutsche Lufthansa AG on the other hand, slid 5.4%. The airline
said late Tuesday it swung to a net profit in 2012, but that it
planned to suspend dividends in 2013 to help retain cash. .
Germany's DAX 30 index gained 0.2% to 7,767.77.
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