By Barbara Kollmeyer, MarketWatch
Most European stocks traded higher on Thursday, following on
from global equity gains, though the major indexes were flat as
broker downgrades in the chemical sector hit several stocks, while
Subsea 7 SA tumbled on an earnings update.
The Stoxx Europe 600 index was flat at 284.55, following a rise
of 1.7% in the prior session, which marked the second straight day
of gains.
Asia stocks moved higher on Thursday, following up on a strong
showing for Wall Street, which rallied as a downward revision for
economic growth cooled talk of a tapering in the Federal Reserve's
bond-buying program. Europe indexes stayed flat ahead of a clutch
of U.S. data and Fed speakers. See preview
Shares of Subsea 7 SA sank 14% after the Norwegian oil-field
services group gave an update on its anticipated losses for an
offshore Brazil project. As a result, the company said it no longer
expects full-year adjusted earnings (before interest, taxes,
depreciation and amortization) to progress compared with 2012.
Also lower were a handful of chemical companies. J.P. Morgan
Cazenove made several cuts to the sector, saying "after three years
of tailwinds, the good times may be over," and potential headwinds
lie ahead. BASF SE , Lanxess AG and Solvay SA were cut to
underweight from neutral.
Those shares were off 2.7%, 5.4%, and 3.8% respectively.
Losses for heavyweight BASF kept the German DAX 30 index pinned
flat at 7,937.59. On the French CAC 40 index , down 0.2% to
3,717.74, Solvay was the leading decliner. Shares of Societe
Generale SA fell 1%.
European finance ministers reached an agreement early Thursday
on rules for winding down insolvent banks, inking a deal in which
banks' shareholders, creditors and big depositors would take the
first hit in the event of a bank crisis. The deal still needs
legislative approval from the European Parliament.
In Spain, shares of Bankia SA rose 3.3% after it sold its stake
in International Consolidated Airlines Group SA for 675 million
euros ($879 million). Shares of IAG fell 1.2% in London.
The FTSE 100 index rose 0.3% to 6,185.96, as resource stocks
pushed higher. Shares of Royal Dutch Shell PLC (RDSA) was up nearly
1%, while miner BHP Billiton PLC lifted 1.1%.
Mining firm Eurasian Natural Resources Corp. fell 0.8% after UBS
cut those shares to neutral from buy.
Leading the gains in London, shares of Smiths Group PLC rose
2.5% after a lift to buy from neutral at UBS, which said shares are
not reflecting upside from a potential sale of its medical
division.
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