By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Stocks in Europe notched small gains
Thursday, clawing out of deeper losses after U.S. equities shifted
their focus from an interest-rate increase comment by the U.S.
Federal Reserve's new chief to improved manufacturing data in the
world's biggest economy.
The Stoxx Europe 600 index finished less than 1 point higher at
327.67, with Germany's Siemens AG pushed up 2.2% following reports
that the industrial conglomerate may restructure operations.
The Stoxx Europe 600 index had been down by 1%, paced by oil
securities as a rise in the U.S. dollar pressured
dollar-denominated crude prices. Shares of BP PLC (BP) gave up 1.8%
and Total SA (TOT) eased 0.1%, but finished off session lows.
European markets had been weighed by the prospect that a U.S.
interest-rate increase may arrive sooner than anticipated.
Federal Reserve Chairwoman Janet Yellen said Wednesday that rate
hikes could happen after "about six months" from the time the
central bank finishes winding down bond purchases. Her comment came
as she answered questions in her first news conference as head of
the Fed.
Risk-off had been the theme for European markets, with traders
"nervous" after Yellen's "hawkish comments," said Naeem Aslam,
chief market analyst at Ava Trade, in emailed comments.
"It appears that her dashboard might be giving her green signals
and making her confident that the bank perhaps could increase the
short-term interest rate in a year's time," he said.
After Yellen spoke, traders in federal funds futures on Tuesday
moved up their bets on rate hikes by two meetings, to April
2015.
Among European indexes, Germany's DAX 30 index shook off losses
and closed up 0.2% at 9,296.12. France's CAC 40 index tacked on
0.5% to settle at 4,327.91, led by a 3.9% advance for insurer AXA
SA and a 2.7% rise for Bouygues SA , which is pursuing Vivendi SA's
French mobile phone unit SFR.
But the U.K.'s FTSE 100 index was stuck in the red, ending down
0.5% at 6,542.44.
Stocks in Asia fell overnight, with Japan's Nikkei Stock Average
logging a 1.7% decline. On Thursday, U.S. stocks opened lower but
later swung higher after data showed manufacturing in the
Philadelphia area rebounded in March from February. Separately, the
Conference Board's leading economic index rose 0.5% in February,
indicating that any weather-related volatility will be short lived.
Much of the U.S. this year has grappled with ultra-cold
temperatures.
Among individual European issues, GlaxoSmithKline PLC (GSK) fell
1.6% in London trade after the company said a treatment for
patients with non-small-cell lung cancer didn't meet its goals in a
late-stage clinical trial.
Also, betting firms extended declines in London from Wednesday
when the U.K. government said it would raise taxes on betting
terminals. Ladbrokes PLC shed 4.5% and William Hill PLC fell
1.4%.
In Frankfurt, stock in Deutsche Boerse AG fell 0.3% after J.P.
Morgan Cazenove cut the company to underweight from neutral.
In other developments Thursday, the European Union reached a
deal over the so-called single-resolution mechanism, which will
centralize control of failing euro-zone banks.
Meanwhile, German Chancellor Angela Merkel said EU leaders will
show readiness at their summit to increase sanctions against Russia
over its actions in Ukraine, and U.S. President Barack Obama said
the U.S. is preparing broader sanctions if Russia "continues to
escalate the situation," in Ukraine.
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