By Carla Mozee, MarketWatch
Euro makes another run at $1.10 vs. dollar
LONDON (MarketWatch) -- European stocks slid Wednesday as the
euro regained traction against the dollar, keeping German shares
from advancing in the wake of encouraging data from Europe's
largest economy.
The Stoxx Europe 600 dropped 1.1% to 397.95, marking the lowest
close since March 17, with only the energy sector advancing.
The pan-European index was stuck in the red after a
better-than-expected report on German business sentiment. The Ifo
Institute's business-climate indicator
(http://www.marketwatch.com/story/ifo-german-business-confidence-rises-again-2015-03-25)
was at 107.9 in March, above the 107.3 forecast by a Wall Street
Journal survey of economists and the highest level since July
2014.
"Germany's strength is good news for the rest of the eurozone,
although the firming recovery in countries like Spain and even
Italy means they may be less dependent on German demand than during
the depths of the crisis in 2011/12," said Christian Schulz, senior
economist at Berenberg, wrote in a report.
Despite the brighter sentiment figures, Germany's DAX 30 fell
further as the session wore on, losing 1.2% to end at 11,502.31,
its lowest close in two weeks, according to FactSet data.
The German index "is generally playing on the [euro-dollar]
trade now," and the euro's advance against the greenback "impacts
negatively on the highly weighted exporters on the DAX," said
Richard Perry, market analyst at Hantec Markets, in emailed
comments.
But Perry said he doesn't see this as too negative, with the
"nice" three-month upward trend intact. The DAX has charged up 21%
this year to record highs, benefiting from the devaluation of the
euro stemming from a European Central Bank asset-purchase program
worth 1.1 trillion euros ($1.21 trillion).
The euro
(http://www.marketwatch.com/story/dollar-stays-weak-as-investors-look-for-fresh-clues-on-direction-2015-03-25)(EURUSD)
on Wednesday bought $1.0977, and had pushed above $1.10 following
the U.S. Commerce Department's report showing durable-goods orders
unexpectedly fell
(http://www.marketwatch.com/story/businesses-cutting-investment-as-durable-goods-orders-slide-2015-03-25).
The euro late Tuesday fetched $1.0926.
U.S. stocks (SPX) (DJI) eventually dropped sharply amid low
volume
(http://www.marketwatch.com/story/us-stocks-wall-street-keeps-a-nervous-eye-on-the-sleeping-giant-dollar-2015-03-25).
In Frankfurt, shares of Deutsche Lufthansa SA fell 1.4%,
extending losses in the wake of Tuesday's deadly Germanwings plane
crash
(http://www.marketwatch.com/story/france-launches-difficult-search-and-recovery-for-germanwings-flight-9525-2015-03-25)
in the French Alps. Germanwings is a Lufthansa subsidiary. The
Airbus A320 plane was carrying 150 people, none of whom
survived.
In Paris, shares of Airbus Group fell 1.4%, contributing to a
1.3% fall in France's CAC 40 to 5,020.99.
Among the worst performers on both the CAC and the Stoxx 600 was
Accor SA . Its shares dropped 4.3% after Eurazeo SA and Colony
Capital said they plan to sell a 9.65% stake in the French company
behind the Sofitel and Novotel hotel brands. Eurazeo shares fell
3.3%.
The U.K.'s FTSE 100
(http://www.marketwatch.com/story/ftse-100-edges-up-but-barclays-falls-after-downgrade-2015-03-25)
fell 0.4% to 6,990.97, with shares of Barclays PLC down 2.5%
following a ratings downgrade at Investec to hold from buy.
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