EUROPE MARKETS: European Stocks Flatten At The Close As Euro Pulls Back
February 22 2017 - 12:53PM
Dow Jones News
By Carla Mozee, MarketWatch
Political risk from French presidential election remains key
driver for euro
European stocks finished flat on Wednesday, backing off their
highest levels in more than a year as investors readied for
potential signs that borrowing costs are about to rise in the
world's largest economy, the U.S.
The Stoxx Europe 600 finished unchanged at 373.38, frustrating
those looking for a fourth-straight win but still hovering at best
levels since late 2015. The regional benchmark on Tuesday rose 0.6%
to 373.40
(http://www.marketwatch.com/story/european-stocks-rise-as-manufacturing-activity-perks-up-2017-02-21),
the best close since Dec. 2, 2015, helped by a better-than-expected
preliminary reading on manufacturing activity in the eurozone
(http://www.marketwatch.com/story/eurozone-economy-shifts-up-a-gear-pmis-show-2017-02-21).
On Wednesday, Germany's closely watched Ifo business climate
index came in above expectations, with a reading of 111.0 in
February, compared with a 109.5 estimate, according to Dow Jones
Newswires.
Germany's DAX 30 finished the trading session up 0.3% to
11,998.59 and earlier crossed above the 12,000 mark for the first
time since April 2015. The export-oriented index was aided by a
decline in the euro against the U.S. dollar, which hit an intraday
low of $1.0496.
Movers: Thyssenkrupp AG shares (TKA.XE) surged 4.6% after the
German industrials heavyweight said it's selling its Brazilian
steel plant
(http://www.marketwatch.com/story/thyssenkrupp-to-sell-brazil-steel-unit-for-eur15b-2017-02-22)
to Ternium SA (TX) in a deal valued at EUR1.5 billion.
On the losing side, shares of Bayer AG (BAYN.XE) fell 0.9%. The
chemicals conglomerate Bayer AG said fourth-quarter net profit
dropped 26% to EUR453 million
(http://www.marketwatch.com/story/bayer-4q-profit-falls-26-missing-expectations-2017-02-22)from
a year earlier, hurt by one-off expenses.
London-based lender Lloyds (LLOY.LN) (LLOY.LN) rose 4.3%. The
bank's pretax profit more than doubled to GBP4.2 billion ($5.2
billion), as it reduced the amount set aside to cover compensation
for customers sold payment-protection insurance (PPI) they didn't
need. It has also carried out a program of cost cuts, including the
closure of branches.
Lloyds said it will pay a total ordinary dividend of 2.55 pence
a share, up 13% on a year ago. It will also issue a special
dividend of 5 pence per share.
UBM PLC (UBM.LN) climbed 4.4% as the business exhibitions
company projected underlying revenue growth in 2017
(http://www.marketwatch.com/story/ubm-projects-underlying-revenue-growth-in-2017-2017-02-22).
Indexes: The FTSE 100 finished the trading day up 0.3% at
7,302.25 and France's CAC 40 closed up 0.1% at 4,895.88.
Euro and French politics: The shared currency eventually pared
its loss against the dollar, trading at $1.0538, after French
centrist politician Francois Bayrou gave up his run for
(http://www.marketwatch.com/story/euro-pares-loss-after-french-politician-bayrou-backs-macron-2017-02-22)president
(http://www.marketwatch.com/story/euro-pares-loss-after-french-politician-bayrou-backs-macron-2017-02-22)
and threw his support behind centrist candidate Emmanuel Macron.
Macron is believed to have a good chance of beating far-right
candidate Marine Le Pen if a second round of voting were needed in
May. Le Pen has called for France to leave the European Union and
the euro.
"Political risk from the French presidential election is
becoming a key driver of increasing euro weakness in recent days.
With a deterioration in polling numbers for candidates such as
Francois Fillon and Emanuel Macron, the prospects of Marine Le Pen
improve," said Richard Perry, market analyst at Hantec Markets, in
a note. The first round of voting is set for April 23.
"Whilst the market is still not anticipating a victory for Le
Pen in the second round, the probability is apparently now above
40% and there still needs to be an adjustment to factor in the
increased risk," Perry said.
French bonds rose late Wednesday, with the yield on the 10-year
bond falling 6 basis points to 1.02%
See:Euro may retest $1.03 as Le Pen rises in the polls
(http://www.marketwatch.com/story/investors-bidding-adieu-to-french-stocks-as-le-pen-gains-in-polls-2017-02-21)
(END) Dow Jones Newswires
February 22, 2017 12:38 ET (17:38 GMT)
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