By Carla Mozee, MarketWatch
LONDON (MarketWatch)--European stocks slipped Wednesday, with a
pull back in shares of broadcaster Mediaset SpA weighing on the
benchmark index after it reached a six-year high.
The Stoxx Europe 600 index gave up 0.1% to end at 341.59. It
ended Tuesday's session at its strongest closing level since
January 2008, at 341.89.
Edging back from highs, European stocks gained no traction after
the European Central Bank's chief economist said the low-inflation
environment in the euro zone has policy makers considering measures
to address the issue. Measures may include issuing a negative
deposit rate on bank deposits. Such a move could prompt banks to
make loans instead of leaving any surplus of money overnight at the
ECB.
Bundesbank President Jens Weidmann late Wednesday reportedly
said the German central bank would support action taken by the ECB,
if warranted, but that not every measure the ECB discusses may be
suitable to tackle the low-inflation problem.
"As the inflation outlook keeps on worsening, the pressure for
the ECB to intervene is reinforced," Société Générale economist
Herve Amourda who in a note also said French consumer prices,
released Wednesday, in April "surprised on the downside."
Highlighting weakness in the euro zone's recovery, figures from
the European Union's statistics agency showed industrial output in
March was down 0.3% from February, and by 0.1% from the same month
a year ago.
Standing out among the largest decliners on the Stoxx 600 index
was Mediaset , falling 6.6% after the Italian broadcaster swung to
a first-quarter loss of EUR12.5 million ($17.14 million), weighed
by its domestic unit.
First-quarter results for Mediaset came in below expectations,
and second-quarter advertising trends "are poor," said analysts at
Barclays on Wednesday. "On this basis, we feel the shares discount
too much recovery."
In London, ITV PLC fell 6.2% after the British broadcaster
issued a trading update. But Compass Group PLC shares pushed up
1.6% as the food services company said it would return 1 billion
pounds ($1.68 billion) to shareholders in a special dividend. The
move follows an increase in first-half profit supported by growth
in North America and emerging markets.
The U.K.'s FTSE 100 index shook off losses by the close, rising
0.1% to 6,878.49, which was enough to mark its highest finish since
late December 1999.
The Bank of England on Wednesday in its May Inflation Report
largely left forecasts for growth and inflation unchanged,
indicating an increase in the benchmark interest rate from a record
low 0.5% remains on course to take place early next year.
Among country-specific stock indexes, Germany's DAX 30 index
ended down less than 1 point at 9,754.39 after Tuesday's close at
an record high. Earlier Wednesday, EU-harmonized German inflation
came in at 1.1% in April, broadly in line with forecasts.
France's CAC 40 index fell 0.1% to 4,501.04.
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