By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks slipped Monday following
a slower-than-expected pace of inflation in the euro zone, while
shares of BNP Paribas SA seesawed ahead of an expected multibillion
dollar settlement with U.S. authorities.
The Stoxx Europe 600 was down less than 1 point at 342.82, and
had lost as much as 0.3% in the wake of a Eurostat report that
inflation remained stable at 0.5% in June from the same level in
May. The reading missed forecasts of 0.6%.
The European Central Bank recently launched measures aimed at
boosting inflation levels in the euro-zone area.
RBC Capital Markets said it was "hard to conceive" the June
inflation data "as being anything other than (at very best)
neutral, to slightly negative, for policy." The next monetary
policy statement from the ECB will arrive on Thursday. Its staff
has projected inflation in the euro zone reaching 0.7% in 2014.
"[B]arring any dramatic divergence from the ECB's baseline
outlook, we think the Governing Council is on the sidelines for the
next few months until such time as it is possible to form some kind
of tentative judgments on the effects of the most recent package of
measures," said RBC Capital's chief European economist James Ashley
in a report.
The preliminary June data showed the weak inflation level
largely was due to food, alcohol and tobacco prices, which fell
0.2% in June.
The euro (EURUSD) bought $1.3655 before and after the inflation
data. It fetched $1.3630 late Friday.
Investor focus is on BNP Paribas SA , ahead of an expected
announcement from the U.S. Justice Department that the French bank
will pay nearly $9 billion in a settlement for allegedly engaging
in transactions with sanctioned countries. BNP shares were up less
than 1 point in Paris trading after rising by as much as 1%
intraday.
The France's CAC 40 equity index reversed course and fell 0.1%
to 4,432.80.
But shares of Dutch electronics group Philips NV (PHG) rose
3.5%, bouncing higher after saying it plans to create a standalone
company by combining its LED-lighting and automotive-lighting
businesses. Sales of the combined businesses were around 1.4
billion euros ($1.9 billion) in 2013, or about 17% of Philips's
total lighting sales.
Elsewhere in the lighting industry, Germany's Osram Licht AG
climbed 5.5%, topping the Stoxx 600 index. The move follows a
ratings upgrade to neutral from overweight at J.P. Morgan Cazenove
after a correction in Osram's shares below the broker's December
2014 target price of EUR35. "Additional restructuring measures and
increased transparency could result in some support for the stock
in the coming six months," wrote analyst Andreas Willi.
Shares of Vestas Wind Systems were up 5.1% after the Danish
company won an order for 225 wind turbines from EDF Renewable
Energy for two projects in the U.S. Delivery is expected to take
place next year.
Among country indexes, the U.K.'s FTSE 100 turned lower by 0.2%,
while Germany's DAX picked up 0.2%.
The Stoxx 600 last week fell 1.8%, the biggest weekly pullback
since mid-April, according to FactSet data. It was on track for
monthly decline of 0.7%, but a gain of 2.2% for the second
quarter.
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