By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks drifted lower Wednesday,
with GlaxoSmithKline PLC among that lost ground and pushed the
pan-European equity index to its first loss in six sessions.
The Stoxx Europe 600 shed 0.1% to 344.29, cutting into its 0.2%
gain on Tuesday that left the index at a six-year high.
Germany's DAX 30 ended nearly 2 points lower at 9,939.17 a day
after notching a record high. Stocks had logged minor gains during
the session although government data showed unemployment in
Europe's largest economy unexpectedly rose in May.
"There is no doubt that investors are banking on the hopes that
the European Central Bank president [Mario Draghi] will initiate
some sort of help," in bolstering regional economic growth and
fighting low levels of inflation, "but at the same the threat of no
action by the ECB remains as real as it can be," said Naeem Aslam,
chief market analyst at Ava Trade, in a note Wednesday.
"But, for the time being, a sharp selloff in the equity markets
does not seem to be an option as the traders keep moving the
markets from strength to strength."
In Frankfurt, shares of Siemens AG picked up 0.6%. The
industrial conglomerate plans to make an official bid for French
firm Alstom SA's energy assets by June 16.
Alstom shares rose 1.1% as an official in French President
François Hollande's office reportedly said General Electric Co.
(GE) has improved its offer to buy Alstom's energy unit. GE will
create 1,000 industrial jobs in France, according to a Bloomberg
report that cited an unnamed person familiar with the matter.
GE's Chief Executive Jeffery Immelt and Siemen's France
chairman, Christophe de Maistre, outlined their cases for a
proposed deal in front of French lawmakers on Tuesday.
But among the shares punished Wednesday were Royal Ahold NV ,
down 3.3% after the Dutch retailer warned that it expects
second-quarter volumes to remain under pressure. First-quarter
profit tumbled 97% following results last year that were buoyed by
a large gain.
Shares of German's Osram Licht AG fell 10% before narrowing
their decline to 6.5%. The fall came after Osram said an
"accelerated decline" in its traditional illumination business has
led the lighting company to now expect revenue on last year's
level, and "at best a modest revenue increase" on a comparable
basis for the current fiscal year.
Shares of GlaxoSmithKline PLC dropped 1.6% after the drug maker
said British regulators are probing its commercial practices. No
details of the action were included in its Tuesday statement, but
Glaxo said it would fully cooperate with the U.K.'s Serious Fraud
Office.
The probe comes as Glaxo tries to clear up allegations from
Chinese officials that Glaxo executives orchestrated the bribery of
doctors and health-care groups in China to boost drug sales.
The U.K.'s FTSE 100 managed to turn higher, by 0.1% to 6,851.22,
with the London Stock Exchange Group gaining 2.6% as the exchange
operator was added to Credit Suisse's Europe focus list. The rating
remained at outperform.
Meanwhile, Goldman Sachs put Telecom Italia SpA on its
conviction buy list, and investors pushed the shares up 4% toward
the top of the Stoxx 600. The move for the telecom company's shares
aided in a 0.9% rise in Italy's FTSE MIB index .to 21,586.01.
In deal news, Nestlé SA has agreed to pay $1.4 billion for the
rights to skin-care products from Valeant Pharmaceuticals Inc.
(VRX) as Nestlé builds up its newly established dermatology unit.
Nestlé shares rose 0.6%.
Metso shares fell 2.2% after Weir Group ended its plan to buy
the Finnish engineering group after Metso rejected its second bid.
Weir shares closed 0.8% lower.
But Royal Bank of Scotland Group PLC (RBS) shares logged a 1.2%
gain, with the bank reportedly planning to cut hundreds of jobs in
its U.S. trading business ahead of the implementation of new U.S.
regulations.
In France, the CAC 40 rose 1.9 points to 4,531.63.
More news from MarketWatch:
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