By Sara Sjolin, MarketWatch
LONDON (MarketWatch)--U.K. stocks posted some of the biggest
losses in Europe on Wednesday as insurance firms headed sharply
lower, leading the European benchmark index to a small drop for a
fourth straight day.
The Stoxx Europe 600 index ended slightly lower at 339.96, after
posting the biggest loss in four months on Tuesday.
The recent losses have come after global stock markets last week
traded at or near record highs, creating fears of an asset bubble
and spurring concerns that a correction is due. Specifically for
Europe, a string of disappointing German data has also highlighted
weaknesses in the euro zone's powerhouse and led to concerns the
country is heading toward zero economic growth. Read: Is Germany
leading the euro zone toward the no-growth cliff?
European benchmarks ended mixed on Wednesday, with both France's
CAC 40 index , up 0.4% at 4,359.84, and Germany's DAX 30 index ,
rising 0.4% to 9,808.20, rebounding after the prior day's sharp
losses.
The U.K.'s FTSE 100 index , however, dropped 0.3% to 6,718.04,
as insurers took a dive. Admiral Group PLC slid 3.3% after the
insurer reported a drop in first-half turnover.
Aviva PLC lost 3.6% as the company said it would focus on a
smaller number of markets to improve its return on capital. Among
other U.K. insurers, Legal & General Group PLC ended 0.8% lower
and RSA Insurance Group PLC lost 1%.
Also in London, shares of BP PLC (BP) erased 0.5% after Deutsche
Bank cut the oil major to hold from buy, according to Dow Jones
Newswires.
Outside the main index in London, J D Wetherspoon PLC shed 2%
after the British pub chain said sales slowed during the World Cup
in soccer.
Focus on central banks
A dearth of economic data for Europe on Wednesday meant that
investors instead focused on key central-bank events. European
Central Bank President Mario Draghi is due to speak in London in
the evening, while Executive Board members Benoît Curé and Peter
Praet spoke in Athens and Paris, respectively. Praet said the ECB's
targeted long-term refinancing operation will break a vicious
spiral of high lending rates for companies, high credit risk and
poor economic performance.
The main event will be the release of minutes from the Fed's
June meeting due at 7 p.m. London time, or 2 p.m. Eastern. Fed
Chairwoman Janet Yellen is clearly among the doves on the
policy-setting committee, and investors are hoping that the minutes
will "provide some clarity and reassurance that Yellen can continue
to hold sway over her more hawkish colleagues," Rebecca O'Keeffe,
head of investment at stockbroker Interactive Investor, said in a
note. Read: Minutes may shed some light on how and when the Fed
will hike
After a solid June jobs report out last week, several banks have
moved forward their forecast as to when the Fed will introduce the
first rate hike.
U.S. stocks traded higher ahead of the minutes.
Europe movers
Back in Europe, airlines rebounded after a sharp selloff on
Tuesday sparked by a profit warning from Air France-KLM . On
Wednesday, Air France-KLM climbed 2% and EasyJet PLC picked up
3.1%. Deutsche Lufthansa AG gained 1.4% after it said it would cut
capacity growth and seek lower costs on long-haul flights.
Gemalto NV added 3% in Amsterdam after Morgan Stanley lifted the
digital-security company to equal-weight from underweight.
Shares of Portugal's Banco Espirito Santo SA slumped 4.7% after
reports that parent company Espirito Santo International delayed
coupon payments on its short-term debt. A representative from Banco
Espirito Santo wasn't immediately available to comment.
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