EUROPE MARKETS: European Stocks Slide, With DAX Falling The Most In 3 Weeks As Euro Leaps
July 18 2017 - 08:49AM
Dow Jones News
By Carla Mozee, MarketWatch
German sentiment declines; Ericsson shares tumble
Stocks across Europe were swept lower Tuesday, under pressure as
the euro stepped up to a 14-month high against the U.S. dollar and
as disappointing corporate earnings reports rolled in.
The Stoxx Europe 600 dropped 0.8% to 383.71, with tech, basic
material and consumer-related shares leading the move lower. Health
care and utility shares, however, rose.
Equity losses came after Republican leaders in the U.S. Senate
late Monday ditched their bill to repeal and simultaneously replace
(http://www.marketwatch.com/story/health-care-overhaul-seems-sunk-as-two-more-republicans-oppose-senate-bill-2017-07-17)
much of the Affordable Care Act, or "Obamacare," because the health
care bill didn't have enough votes to pass.
That seemed to rattle investors' faith that President Donald
Trump would be able to push through his pro-growth agenda, and the
ICE Dollar Index was pushed back to levels not seen since September
2016, Factset data show.
"Without a successful repeal of the Obamacare legislation, [U.S.
President Donald] Trump will have trouble financing his own plans
making it very difficult to see how the dollar can remain bullish,"
said ADS Securities researcher Konstantinos Anthis in a note.
That helped drive the euro above $1.15 against the U.S. dollar
for the first time since May 2016. A stronger euro can hurt
European exporters as it makes their products more expensive for
overseas customers to purchase.
In Frankfurt, the exporter-heavy DAX 30 index dropped 1.2% to
12,43.93, losing the most since June 29, as the euro climbed to
$1.1557 from $1.1479 late Monday.
European equities were among those that had rallied after
Trump's election in November on the prospect that plans for higher
fiscal spending and lower corporate taxes would benefit European
companies.
Earnings season: Ericsson shares (ERIC) tumbled nearly 13% after
the Swedish telecom-equipment maker swung to a bigger-than-expected
net loss
(http://www.marketwatch.com/story/ericsson-swings-to-loss-vows-to-step-up-cost-cuts-2017-07-18)
of 1.01 billion Swedish kronor ($122.3 million) in the second
quarter. The company warned that earnings could weaken further as
the market continues to struggle.
Zalando SE (ZAL.XE) shares sank 9.1% after the German online
retailer's sales growth slowed in the second quarter, according to
a preliminary earnings report.
But shares in Novartis AG (NOVN.EB) moved up 2.1% after the
Swiss drug maker reported a slight gain in second quarter net
income
(http://www.marketwatch.com/story/novartis-income-falls-but-beats-expectations-2017-07-18).
IG Group Holdings PLC (IGG.LN) rallied 11% after the
spreadbetting company said full-year pretax profit has increased
(http://www.marketwatch.com/story/ig-group-profit-up-as-client-numbers-gain-2017-07-18)
and that there's been no adverse impact from a U.K. regulator's
recent proposals to reform the asset management market.
Individual indexes: France's CAC 40 index gave up 0.8% to
5,189.46, and Spain's IBEX 35 moved down 0.7% to 10,571.
Italy's FTSE MIB shed 0.4% at 21,403. The U.K.'s FTSE 100 was
steady around 7,402.
(http://www.marketwatch.com/story/ftse-100-drops-as-us-dollars-slide-boosts-pound-2017-07-18)
ECB and euro: "With the euro having broken above multi-months
highs it will be key to see whether the single currency holds on to
its gains ahead of the European Central Bank meeting on Thursday,"
Anthis said.
ECB President Mario Draghi is expected to be pleased with the
progress of the euro area and attempt to prepare the markets for
reduced stimulus from the ECB in the months to come, so the shared
currency could trade with a positive bias going into the central
bank's meeting, he added.
Data: German economic sentiment dropped in July
(http://www.marketwatch.com/story/german-economic-sentiment-drops-in-july-zew-2017-07-18),
according to the ZEW think tank, but the outlook for Europe's
largest economy continues to be favorable.
The pace of U.K. inflation eased unexpectedly in June, to 2.6%
(http://www.marketwatch.com/story/uk-inflation-slows-unexpectedly-in-june-2017-07-18),
the Office of National Statistics said.
(END) Dow Jones Newswires
July 18, 2017 08:34 ET (12:34 GMT)
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