EUROPE MARKETS: European Stocks Suffer Worst Week In 3 Months, Hurt By Earnings And Stronger Euro
November 10 2017 - 1:55PM
Dow Jones News
By Carla Mozee, MarketWatch
Altice embarks on management shakeup; Arcelor profit jumps
European stocks fell Friday, marking their worst weekly drop in
three months by rounding it off with a disappointing outlook from
Cartier parent Richemont and lingering concerns about tax-cut
legislation in the U.S.
What markets are doing: The Stoxx Europe 600 shed 0.4% to end at
388.69, the lowest close since Oct. 25, according to FactSet data.
Only the financial sector finished higher. On Thursday, the index
dropped 1.1%
(http://www.marketwatch.com/story/european-stocks-head-for-3rd-loss-as-burberry-plunges-2017-11-09),
the biggest one-day percentage loss since June 29.
The index closed this week down by 1.8%, the sharpest percentage
loss since the week ended Aug. 11.
Germany's DAX 30 index fell 0.4% to 13,127.47, and France's CAC
40 gave up 0.5% at 5,380.72. The indexes this week declined 2.6%
and 2.5%, respectively.
The U.K.'s FTSE 100 gave up 0.7%
(http://www.marketwatch.com/story/retailers-help-drive-ftse-100-toward-biggest-weekly-fall-in-2-months-2017-11-10)
to end at 7,432.99, and Spain's IBEX 35 fell 0.5% to 10,992.70.
Those gauges closed the week down by 1.7% and 2.6%,
respectively.
The euro traded at $1.1656, up from $1.1643 late Thursday in New
York. The shared currency was up roughly 0.4% this week against the
greenback.
Read:Is British leader Theresa May on her way out? Why that's
the fear--and why it matters
(http://www.marketwatch.com/story/is-british-leader-theresa-may-on-her-way-out-why-thats-the-fear-and-why-it-matters-2017-11-09)
What's moving markets: A busy week of corporate updates spread
into Friday. Investors appeared disappointed with an outlook from
Richemont SA, whose high-end brands include Cartier and Montblanc.
Investors in rival luxury company Burberry Group PLC continued to
selloff its shares after they were mauled Thursday.
Meanwhile, better-than-expected French economic data helped push
the euro higher, while a stronger reading on U.K. industrial data
pulled sterling to its highest since last week against the dollar.
Stronger currencies can hurt shares of multinational companies in
Europe as earnings made by those companies can get squeezed when
converted back into euros and pounds.
Meanwhile, concerns about a possible delay in tax cuts
(http://www.marketwatch.com/story/senate-bill-delays-corporate-tax-cut-doesnt-repeal-estate-tax-2017-11-09)
in the U.S. lingered. Those worries contributed to losses in U.K.
and Asian equities
(http://www.marketwatch.com/story/asian-markets-pull-back-following-wall-streets-losses-2017-11-09)
on Friday, following a selloff in the U.S. on Thursday
(http://www.marketwatch.com/story/us-stocks-poised-to-lose-grip-of-record-highs-on-delay-worries-about-tax-plan-2017-11-09).
The prospect of lower taxes and other stimulus put forward by the
Trump administration has bolstered equity markets over the past
year.
What strategists are saying: "The week looks set to close in
dramatic fashion, with widespread selling across European and U.S.
indices amid a weakening U.S. corporate tax reform outlook and
strengthening European currencies," said Joshua Mahony, market
analyst at IG, in a note.
"Early [pound] gains were built upon amid the latest comments
from [EU Brexit negotiator] Michel Barnier who showed that despite
a shortening timeline, there is still a chance to start trade talks
in December. [U.K. Brexit negotiator] David Davis now has a
fortnight to agree a divorce payment or else wait until March to
begin trade talks," said Mahony.
Read:Fresh sparring over Northern Ireland marks Brexit talks
(Fresh%20sparring%20over%20Northern%20Ireland%20marks%20Brexit%20talks)
Stock movers: Richemont (CFR.EB) slumped 3.8% after a downbeat
outlook from the Swiss luxury goods company.
(http://www.marketwatch.com/story/richemont-profit-soars-on-asia-growth-2017-11-10)
"While we cannot predict the environment for the full year, it
is clear that the full-year results on a comparative basis will not
see the exceptional level of growth reported in the period under
review," said Richemont's Chairman Johann Rupert. Richemont's
first-half profit did jump 80%, aided by strong growth across all
of its divisions.
Leonardo SpA (LDO.MI) sank 21.6% as the Italian defense and
aerospace company cut its yearly profit and sales expectations and
said it's seeing challenges in its helicopter business. "We can now
see that the full year as a whole will be tougher than originally
expected," the company said in a statement.
Altice NV shares (ATC.AE) swung lower to trade down 3.4%. The
French telecoms group outlined a management shake-up
(http://www.marketwatch.com/story/altice-replaces-ceo-combes-in-exec-shakeup-2017-11-10)
that includes the resignation of Chief Executive Michel Combes. The
moves come following disappointing third-quarter results that led
to a plunge in Altice's share price.
ArcelorMittal MT (MT)(MT) climbed 3.4%, with the
Netherlands-listed steelmaker's third-quarter net profit nearly
doubling
(http://www.marketwatch.com/story/arcelormittal-profit-almost-doubles-beats-views-2017-11-10)
to $1.21 billion and outstripping expectations.
Boskalis Westminster NV fell 2.6% after the dredging and
maritime services company reiterated it expects second-half net
profit to be comparable to its first-half profit
(http://www.marketwatch.com/story/boskalis-revenue-drops-in-rough-maritime-market-2017-11-10)
of 75 million euro ($87.3 million), excluding some restructuring
charges to be taken in the second half.
Burberry (BRBY.LN) (BRBY.LN) fell 2.3%, with UBS downgrading its
shares to neutral from buy. The stock on Thursday tumbled 10% after
the British luxury goods retailer warned it doesn't expect sales
growth until fiscal 2021
(http://www.marketwatch.com/story/burberry-shares-drop-as-it-warns-on-sales-2017-11-09).
Economic data: France's industrial output rose 0.6%, slightly
more than anticipated
(http://www.marketwatch.com/story/frances-industrial-output-rises-more-than-seen-2017-11-10)
in September as pharmaceutical production jumped, the Insee
statistics agency said.
(END) Dow Jones Newswires
November 10, 2017 13:40 ET (18:40 GMT)
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