By Carla Mozee, MarketWatch Japan GDP shock follows weak
eurozone growth
LONDON (MarketWatch) -- U.K. stocks turned higher Monday, given
a boost, along with other European equities, on the prospect of
further monetary stimulus from the European Central Bank being
pumped into the eurozone to help boost Europe's flagging
economy.
ECB President Mario Draghi during testimony to the European
Parliament in Brussels said the central bank would be open to
potentially buying government bonds, if policy makers decide that
further stimulus measures need to be taken. Draghi also reiterated
his view that eurozone governments must enact structural reforms to
foster economic growth.
The FTSE 100 in late-afternoon trade was up 0.3% at 6,674.90,
with eight of ten sectors posting gains. Miners ranked among the
strongest performers, with Fresnillo PLC and Rangold Resources Ltd.
each higher by 2.2%.
The British benchmark had been down for most of the session
after data showed real gross domestic product in Japan, the world's
third-largest economy, shrank 1.6% in the third quarter, as
companies cut inventories and capital investment was subdued. None
of the 18 economists surveyed by The Wall Street Journal had
forecast recession in Japan.
News of contraction in Japan comes just days after the release
of lackluster growth data from the eurozone, the U.K.'s largest
trading partner.
European stocks reversed course and rose 0.5%. The Stoxx Europe
600 had been hurt after a rout in Japanese stocks that left the
Nikkei Stock Average down 3%. In London, shares of Asia-focused
Standard Chartered PLC fell 2.6%, and HSBC Holdings PLC (HSBC)
moved down 0.5%.
Shares of engineering firm Weir Group PLC , whose business
includes work in the oil-and-gas market, lagged the FTSE 100. They
were shot down 3.8% following a rating downgrade to underperform
from outperform at Exane BNP Paribas, with analysts saying the
weakness in oil prices could result in a 25% cut in rig count.
But an upgrade of ARM Holdings PLC at Exane to outperform sent
shares of the chip designer up by 2%.
Meanwhile, AstraZeneca PLC fell 2.4% after U.S. drug maker
Pfizer Inc. (PFE) said it's teaming up with Germany's Merck KGaA to
develop an anti-cancer tumor treatment. Pfizer will make an upfront
payment of $850 million to Merck as part of the deal, leading
Pfizer (PFE) to cut its 2014 earnings forecast.
You're invited: A free evening event focusing on investing
opportunities in Europe
Will you be in London on Dec. 3? Then you're invited to our
MarketWatch Investing Insights event, "The worse Europe gets, the
more you should invest."
Governments are in trouble, reform efforts have stalled,
unemployment is climbing. the news from the eurozone is bleak. And
investors are fleeing. But that's a mistake: The worse the economic
data from Europe get, the more you should be buying. Why? Because
actions by the ECB will boost asset prices and the stock market in
particular. And, big exporters can grow sales. Lower costs and
steady sales translate into higher profits and dividends. Join us
for an evening of cocktails and conversation to explore these
opportunities.
Our panel will be led by MarketWatch Columnist Matthew Lynn, a
renowned financial journalist based in London and the author of
"Bust: Greece, the euro and the Sovereign Debt Crisis." He'll be
joined by Mark Hulbert, MarketWatch columnist and editor of the
Hulbert Financial Digest.
This event is free, but RSVPs are required. It will be held
Wednesday evening, Dec. 3, in London. For more information or to
RSVP, send an email to marketwatchevent@wsj.com
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