By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks were wavering on Friday,
retreating from a seven-year high, but managing to remain on course
to log a monthly advance.
The Stoxx Europe 600 edged up less than 1 point to 390.79. The
benchmark on Thursday climbed 1%
(http://www.marketwatch.com/story/european-stocks-rise-as-german-unemployment-falls-2015-02-26)
to mark its best finish since June 2007, according to FactSet data.
For February, the pan-European index looks set to rise 6.5%, which
would follow a 7.2% jump in January.
The February rise has been aided by strength in German equities,
with the DAX 30 marking its 18th record closing high of 2015 during
the month. As well, the U.K.'s FTSE 100 earlier this week logged
its best closing level since December 1999.
Goldman Sachs said it remains positive on European equities, and
expects a total return of 10% over 12 months on the Stoxx 600, and
12.5% return on the Euro Stoxx 50 over the same period.
"Our continuing optimism is based on the ongoing impact of
[quantitative easing], moderating deflationary concerns, a decline
in the [equity risk premium] and stronger European growth," wrote
Goldman analysts led by Peter Oppenheimer in a Thursday note,
adding that have increased their overweight in consumer cyclicals
and remain underweight consumer staples.
Barclays on Thursday noted that nearly 70% of companies on the
Stoxx 600 have reported financial results for the fourth quarter.
"Reported earnings have been largely in-line with expectations,
with both the number of beats and misses running at the lowest
level for more than four years," wrote analyst Alex Stewart. He
added that consensus-earnings revisions for 2015 are still on a
downward trajectory.
On Friday, the DAX 30 turned up 0.1% at 11,317.10 after data
showed German inflation in February rose 0.1% on a year-over-year
basis, compared with expectations of a 0.5% decline. EU-harmonized
consumer prices in February fell 0.1%, confounding expectations of
a 0.4% decline.
Overall, the data have few implications for the European Central
Bank, said Robert Wood, chief U.K. economist at Berenberg wrote in
a note. "On the one hand, smaller price falls for food and energy
mean consumers can look forward to less of a real income boost than
otherwise," he said. "On the other hand, higher headline inflation
cuts the potential risk of inflation expectations becoming
destabilised, which would make the eurozone more vulnerable to
deflationary shocks."
The euro (EURUSD) had bought as much as $1.1249 after the data.
But the upside move eventually fizzled out, leaving the shared
currency at $1.1188 versus $1.1199 late Thursday.
France's CAC 40 was off 0.1% at 4905.24, and the FTSE 100 was
down 0.1% at 6,946.60.
(http://www.marketwatch.com/story/iag-climbs-in-london-ftse-100-heads-toward-monthly-gain-2015-02-27)
Greece's Athex Composite was down 3.5% at 873.74, remaining
lower after news that lawmakers in Germany voted to approve a
four-month extension of Greece's bailout. The Athens benchmark is
on track for a February gain of 21%, which would be its biggest
monthly gain since April 2009, when it rose 21.9%.
Among Stoxx 600 movers, International Consolidated Airlines
Group SA rose 2.7%. The British Airways operator on Friday
increased its 2015 operating profit target by 22%
(http://www.marketwatch.com/story/iag-climbs-in-london-ftse-100-heads-toward-monthly-gain-2015-02-27),
as lower fuel costs helped the carrier post a jump in net
profit.
Airbus Group NV shares popped up 6.9% after the plane maker said
it would pay a record dividend of 1.20 euros a share, and said
profit last year rose 59%
(http://www.marketwatch.com/story/airbus-pays-record-dividend-as-profit-jumps-2015-02-27-14853655).
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