EUROPE MARKETS: European Stocks Lower As Miners Suffer, French Election Approaches
April 18 2017 - 6:19AM
Dow Jones News
By Carla Mozee, MarketWatch
Pound drops to $1.2515 ahead of unscheduled statement by U.K.'s
prime minister
European stocks were in selloff mode Tuesday, with commodity
shares struggling and investors nervous ahead of the first round of
voting in France's presidential election on Sunday.
U.K. stocks contributed to the slide, holding to losses
following news of an unscheduled statement to be made by U.K. Prime
Minister Theresa May.
The Stoxx Europe 600 index declined 0.6% to 378.44. No sector
moved higher, and oil and gas and basic materials groups were
losing the most, FactSet data showed. Trading was closed Monday for
the Easter holiday. Last week, which was shortened by the Good
Friday holiday, the regional benchmark fell 0.2%, its first
pullback in three weeks.
Miners: Tuesday's session saw European mining shares shoved
lower as iron ore prices slumped to their lowest in five months on
concerns stemming from China. The world's second-largest economy
over the weekend posted first-quarter gross domestic product of
6.9%
(http://www.marketwatch.com/story/china-gdp-grows-at-fastest-pace-since-2015-2017-04-16),
the fastest rate of growth since 2015.
"Though headline activity was robust, we see signs that growth
may be peaking," said UBS economist Donna Kwok in a research note.
"Despite property activity's rally in Q1, real property investment
was not as strong and has in fact been losing momentum since the
start of 2017."
Investors in mining shares watch developments in the Chinese
property market as the country is a major buyer of precious and
industrial metals. The Stoxx Europe 600 Basic Resources index
stumbled 2.4% on Tuesday.
"March's mixed import data also supported our view that while
Chinese domestic demand remains resilient, its momentum may be
approaching if not already peaked," said Kwok.
Among miners, steel producer ArcelorMittal (MT) sank 5%, Tenaris
SA (TEN.MI) fell 3%, Antofagasta PLC (ANTO.LN) fell 3.2% and
Glencore PLC (GLEN.LN) moved down 2.9%.
Losses for Antofagasta and Glencore weighed on the U.K.'s FTSE
100
(http://www.marketwatch.com/story/ftse-100-dragged-lower-as-mining-shares-sell-off-2017-04-18)
, which fell 1.1%.
The index remained lower following news that U.K. Prime Minister
Theresa May will make a statement
(http://www.marketwatch.com/story/pound-slides-as-uk-pm-may-set-to-make-unscheduled-statement-2017-04-18)
at 11:15 a.m. London time, or 6:15 a.m. The pound fell to an
intraday low of $1.2515 ahead of her statement.
France: In Paris, the CAC 40 slid 1.1% to 5,017.64, with only
Air Liquide (AI.FR) clinging to a slim gain. The move comes ahead
of Sunday's first vote in the country's presidential election.
"The difference of votes between the 4 [leading] candidates is
less than 3% which poses more uncertainty to the election," said
FXPro technical analyst Devata Tseng in a note.
"While the latest odds still give independent Emmanuel Macron a
healthy chance of winning in May, his odds have fallen as those of
[conservative François] Fillon and far-left candidate Melenchon
have surged," wrote Kathleen Brooks, research director at City
Index.
"If we get a Macron/Fillon second round runoff, this is likely
to be considered 'market friendly', triggering a rally in the euro,
the CAC, but also in the German DAX and Eurostoxx index, which have
had decent correlations with the French bond yield this year," she
said.
The euro was buying $1.0656, compared with $1.0644 late Monday
in New York.
In Frankfurt, the DAX 30 index fell 0.4% to 12,058.38.
(END) Dow Jones Newswires
April 18, 2017 06:04 ET (10:04 GMT)
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