By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- German stocks extended their record
streak into a third straight day on Thursday, while a pan-European
equity index erased losses to end higher after better-than-expected
U.S. jobs data.
The Stoxx Europe 600 index ended marginally higher at 303.74,
closing at the highest level since June 2008.
The index has gained nearly 22% over the past 12 months, boosted
by cheap liquidity from central banks, which are trying to revive
economic growth.
In the same vein, the European Central Bank cut interest rates
to a record low of 0.5% last week, sending most of Europe's major
indexes to 2013 highs.
On Thursday, investors paused for breath after the recent rally,
said Keith Bowman, equity analyst at Hargreaves Lansdown in
London.
"There are no catalysts today. We have seen corporate results
beginning to wind down a bit in the U.S., and maybe the next
catalyst is U.S. retail sales that are out on Monday," Bowman said.
"The weekly jobless figures from the States gave some reassurance
if you like, but it's not on the same level as the monthly
figures."
"For now, the biggest support comes from central banks globally
that are very firmly in place to ease, and there are no other
obvious reasons for the high levels we're seeing," he added.
Among the biggest decliners in the pan-European index, British
Sky Broadcasting Group PLC sank 6.2%, after BT Group PLC revealed
its new sport commercial TV packages for pubs and hotels at
significantly lower prices than Sky. Shares of BT lost 2.3%.
Shares of Experian PLC jumped 6.4%. The credit-report firm said
it would continue to buy its own shares, while also raising
full-year dividends 9%. The company, however, posted a 36% drop in
pretax profit for the full year.
Jobless claims
European stock markets trimmed losses in afternoon action, after
U.S. data showed initial jobless claims last week dropped to the
lowest level since January 2008. U.S. stocks traded mostly lower on
Wall Street, after the Dow Jones Industrial Average (DJI) and
S&P 500 index (SPX)both closed at all-time peaks on
Wednesday.
Investors also looked east where most Asian bourses fell after
data showed consumer prices rose more than expected in China. The
April CPI rose 2.4% from a year earlier, topping analysts
forecasts.
Some analysts fear that rising inflation may discourage the
Chinese government from easing policy further, which would mean
less liquidity injected into the economy.
"Should this happen, then the consequences will likely be played
out on a global basis, but given the overshoot was so limited, the
caution may be somewhat exaggerated by the fact markets are simply
looking a bit toppy at these levels," said Fawad Razaqzada, market
strategist at GFT Markets, in a note.
In the U.K., the Monetary Policy Committee at the Bank of
England on Thursday decided to leave the key lending rate at a
record low of 0.5%, where it has stood since March 2009. The
central bank also left the size of its asset-purchase program
unchanged at 375 billion pounds ($582.90 billion). Both decisions
were expected.
Movers
The U.K.'s FTSE 100 index closed 0.1% higher at 6,592.74.
Shares of Standard Chartered PLC fell 2.5% after J.P. Morgan
Cazenove cut the bank to neutral from overweight a day after the
company reported a drop in first-quarter profit.
Shares of miner Eurasian Natural Resources Corp. dropped 3.9%,
after the firm reported mixed first-quarter output results with
iron ore, ferroalloy and aluminum down on the year, while copper
output improved in the period.
France's CAC 40 index posted one of the biggest drops among
country-specific indexes, down 0.7% to 3,928.58.
Heavyweight drug maker Sanofi SA (SNY) lost 0.6%, as the stock
went ex-dividend, meaning new investors will miss out on the latest
dividends.
In Germany, the DAX 30 index gained 0.2% to 8,262.55, marking an
all-time high closing level.
Shares of Kloeckner & Co. SE added 2.5% in Frankfurt, after
Citigroup lifted the steel trader to neutral from sell.
Outside the major indexes, shares of SNAM SpA slumped 5.1%,
after Italian energy company ENI SpA said it completed the sale of
an 11.7% stake in SNAM.
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