EUROPE MARKETS: European Stocks Rise As Manufacturing Activity Perks Up
21 February 2017 - 9:37PM
Dow Jones News
By Carla Mozee, MarketWatch
Bank shares lag as HSBC is knocked down after reporting a
loss
European stocks edged higher Tuesday, aided by gains for miners,
but the regional benchmark's advance was held back by the worst
performance for HSBC PLC shares in more than a year.
The Stoxx Europe 600 was up 0.2% at 371.88, but the financial
group was down nearly 1%. The pan-European index on Monday rose
0.2%.
(http://www.marketwatch.com/story/european-stocks-step-higher-led-by-rbs-rolls-royce-2017-02-20)
European equities held onto higher ground after a
better-than-expected preliminary reading on manufacturing activity
in the eurozone. IHS Markit's February PMI gauge of eurozone
manufacturing activity came in at 56.0, compared with a 54.3
estimate from FactSet.
HSBC slides: The Stoxx Europe 600 Banks Index lagged other
sectors, as shares of HSBC (HSBA.LN) (HSBA.LN) (HSBA.LN) dropped
6.4%. The drop came after the Asia-focused bank reported a
fourth-quarter net loss of $4.23 billion
(http://www.marketwatch.com/story/hsbc-loss-widens-to-423b-plans-further-buyback-2017-02-21),
widening from a loss of $1.33 billion a year ago. HSBC did say it
plans to buy back an additional $1 billion of shares.
HSBC shares were moving toward their largest one-day percentage
decline since August 2015, according to FactSet data.
"The extension of the group's share buyback by another $1
billion ... will go some way to cushioning the hit to sentiment ...
however, we think applause for the additional payout is somewhat
muted, in view of HSBC's backsliding common-equity tier-one ratio,"
said Ken Odeluga, market analyst at City Index, in a note.
Odeluga noted that the ratio was at 13.6% at the end of its
year, compared with 13.9% in its third quarter.
"It's a modest retreat of regulatory capital, so direct
consequences will be immaterial, but again, the timing is
unfortunate," he said.
Movers: At the bottom of the Stoxx 600 were shares of John Wood
Group PLC (WG.LN) , as they tanked 10.8%. The oil-services
company's yearly net profit fell to $27.8 million
(http://www.marketwatch.com/story/john-wood-yearly-profit-drops-but-dividend-raised-2017-02-21),
from $79 million the previous year, as revenue fell.
But elsewhere in the commodities group, BHP Billiton (BLT.LN)
(BHP.AU) (BHP.AU) shares rose 0.4%. The world's largest miner by
market value swung to a profit of $3.20 billion in its fiscal first
half
(http://www.marketwatch.com/story/bhp-billiton-returns-to-profit-raises-dividend-2017-02-21-04855710),
aided by higher commodity prices and cost cutting. BHP also said
it's raising its dividend.
Anglo American PLC (AAL.LN) also said Tuesday it has swung to a
yearly profit, making $1.6 billion as commodity prices have
increased
(http://www.marketwatch.com/story/anglo-american-swings-to-profit-on-rising-prices-2017-02-21).
But the miner's shares were losing steam, down 0.4%.
Among the session's best performers was InterContinental Hotels
Group PLC. (IHG) Shares rose 2% after the company behind the Crowe
Plaza and Holiday Inn chains raised its dividend by 11%
(http://www.marketwatch.com/story/ihg-underlying-2016-profit-rises-hikes-dividend-2017-02-21)
and reported higher underlying earnings for 2016.
Economic docket: A rise in the price of energy and fresh produce
lifted French inflation
(http://www.marketwatch.com/story/french-inflation-up-13-on-year-lower-on-month-2017-02-21)
in January, according to national statistics agency Insee. France's
Consumer Price Index increased 1.3% on the year, but was 0.2% lower
on the month.
The euro was buying $1.0553, compared with $1.0609 late Monday
in New York. The dollar was rising against major rivals after
Philadelphia Federal Reserve Bank President Patrick Harker, in an
interview with Market News International, said he would likely
support an interest rate increase in March
(http://www.marketwatch.com/story/dollar-rises-after-fed-comments-euro-weakens-2017-02-21)
if he sees additional evidence that U.S. inflation is gaining
momentum.
(END) Dow Jones Newswires
February 21, 2017 05:22 ET (10:22 GMT)
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