By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Most European stock markets closed lower
on Tuesday, weighed by companies such as Vivendi, BASF and
Fresenius dropping after earnings reports, while the benchmark
index nudged a late-session rise spurred by a positive trading mood
in the U.S.
The Stoxx Europe 600 index rose 0.1% to end at 338.39, closing
at the highest level since January 2008. The benchmark wobbled
around in red territory for most of the trading day, but started
moving higher right before the close as U.S. markets trended
higher.
Shares of Novo Nordisk AS (NVO) helped lift the pan-European
index, rallying 5.9% to an all-time closing high after J.P. Morgan
Cazenove lifted the insulin maker to overweight from underweight.
The analysts said the Danish company is likely to gain market share
over the long term, but that it is not reflected in the current
valuation.
Shares of Jyske Bank AS jumped 10.5% after the Danish bank said
late Monday it has agreed to merge with unlisted mortgage-credit
institution BRFkredit.
Several prominent companies weighed on the index, however, after
reporting earnings. Shares of Fresenius SE & Co. KGaA slid 4.2%
after the health-care firm laid out its 2014 outlook, which was
markedly below market forecasts.
Shares of Vivendi SA dropped 1.1% after the French telecoms and
media firm said sales continued to suffer at the group's French
phone business, SFR, last year.
HSBC Holdings PLC (HSBC) lost 1.4% after Citigroup cut the
heavyweight bank to neutral from buy following the company's
disappointing earnings report out on Monday.
In data news in Europe, the second print on German gross
domestic product released Tuesday showed the economy expanded by
0.4% in the fourth quarter, in line with analyst expectations and
the preliminary estimate.
In France, a report Tuesday from statistics bureau Insee showed
business confidence remained steady in February, at the same level
recorded in the two previous months. Business confidence for
Germany brightened for a fourth straight month in February, data
showed on Monday.
The most anticipated data release this week is the euro-zone
report on consumer prices out on Friday, which could add more
pressure on the European Central Bank to ease policy further at its
meeting on March 6. Some analysts expect annual inflation dropped
to 0.6% in February, highlighting concerns that the region may be
heading for deflation.
Former European Central Bank President Jean-Claude Trichet said
on Monday that deflation is a "potential new challenge" for Europe,
with the real threat looming if inflation expectations become
un-anchored. He stressed, however, that Europe seems to have
well-anchored expectations, but "that does not mean that you do not
have to be very careful permanently."
That view was also echoed in the in the European Commission's
economic forecasts published on Tuesday, where economists warned
that the risk of deflation could sabotage Europe's recovery.
In the U.S., data on Tuesday showed the pace of U.S. home-price
growth slowed down at the end of 2013, declining for a second
month. Meanwhile, the Conference Board's consumer confidence index
fell to 78.1 in February from 79.4 in January, based on reduced
expectations for the months ahead.
Among country-specific indexes in Europe, the U.K.'s FTSE 100
index lost 0.5% to 6,830.50, after closing at its highest level
since 1999 on Monday.
Germany's DAX 30 index fell 0.1% to 9,699.35, and France's CAC
40 index gave up 0.1% to 4,414.55.
Heavyweight BASF SE dropped 0.2% in Frankfurt after the
chemicals firm said it expects earnings to increase only slightly
this year as it faces a patchy economic recovery.
Mining firms dropped in London as most metals prices declined.
Shares of Rio Tinto PLC (RIO) dropped 2.8%, BHP Billiton PLC (BHP)
fell 1.6%, and Glencore Xstrata PLC (GLCNF) erased 0.7%.
Outside the main indexes, shares of Ashmore Group PLC slid 6.5%
after the emerging-markets asset manager reported a drop in fiscal
half-year earnings.
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