By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks slipped Wednesday, with
losses for shares of BNP Paribas SA and GlaxoSmithKline PLC among
those tugging the pan-European equity benchmark back from a strong
gain logged in the previous session.
The Stoxx Europe 600 shed 0.1% to 337.89, slightly cutting into
the index's 1% rise on Tuesday, which was aided by gains for energy
giant BP PLC For the month, the Stoxx 600 rose 1.1%.
In currency action, the euro climbed against the U.S. dollar
after Eurostat said a preliminary euro-zone inflation reading for
April came in at 0.7%. Analysts had widely expected a rise of 0.8%,
mainly because of the timing of Easter. The euro (EURUSD) bought
$1.3867, rising from $1.3796 after the report. The shared currency
late Tuesday bought $1.3809.
The inflation reading was consistent with the European Central
Bank's preference "to wait for more evidence on whether the
downside price risks would raise the deflationary flag, or ride out
a time lag before inflation stabilizes higher," wrote Ashraf Laidi,
chief global strategist at City Index. The ECB will meet next
week.
Late Wednesday, investors will hear from the U.S. Federal
Reserve, which is expected to again reduce the size of its
bond-buying program.
Citi Index's Laidi said the April inflation data also
underscores its view that the euro could recapture the $1.3970-80
level, "as long as the ECB refrains from slashing rates and the Fed
deploys the necessary rhetoric to drive down bond yields despite
its gradual tapering of asset purchases."
Among Europe's biggest equity decliners, BNP Paribas dropped
3.2% after the French bank warned that it may pay more than the
$1.1 billion it had set aside last quarter to cover potential fines
stemming from alleged U.S. sanctions violations.
GlaxoSmithKline fell 2% as the drug maker posted a 30% drop in
first-quarter profit. Declining sales of respiratory drugs in the
U.S. were among the factors that weighed on profit, as well as
highlighted Glaxo's reasoning behind entering an asset-sales and
-swaps plan with Novartis AG
Standard Life shares gave up 1%, after the insurance company
said U.K. annuity sales have declined about 50% since the
government in March proposed pension-industry changes.
But Europe's top advancer was Alstom SA , surging 9.3% as the
board of the French conglomerate backed a review of a roughly $12
billion bid from General Electric Co.(GE) for Alstom's energy
business.
Alstom also said it will review any rival offer from Germany's
Siemens AG (SI). Siemens's said in a letter to Alstom that Alstom
was slow to respond to its original proposal to buy its energy
units, which included a cash payment of up to 11 billion euros
($15.2 billion) and a swap of some of Siemens's trains operations.
Siemens shares finished higher by 0.9%.
In country-specific indexes, the U.K.'s FTSE 100 closed up 0.2%
at 6,780.03, aided by a rise shares of oil major Royal Dutch Shell
PLC (RDSB). Germany's DAX 30 rose 0.2% to 9,603.23, while France's
CAC 40 gave up 0.2% to 4,487.39.
Russian stocks fought off losses, with the blue-chip MICEX index
ending up 0.1% and the RTS index gaining 0.2%. The indexes had
declined earlier in the session as the International Monetary Fund
reportedly said Russia has fallen into recession. International
sanctions imposed on Moscow by the U.S. and EU in relation to its
role in Ukraine's political crisis are hurting the economy and
threatening investments, said Antonio Spilimbergo, the IMF's
mission chief to Russia, according to Reuters.
The IMF now expects Russia's economy to grow 0.2% in 2014
forecast, well below its previous forecast of 1.3% growth, Reuters
reported.
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