By Sara Sjolin, MarketWatch
U.K. retail sales decline, but beat views
European stocks broke their longest losing run in a year on
Thursday, with major regional indexes rebounding after
well-received corporate updates. Investors also cheered a rise in
shares of car makers after the release of encouraging EU sales
figures.
What are markets doing: The Stoxx Europe 600 index rose 0.8% to
close at 384.93, snapping a seven-session streak of declines.
Germany's DAX 30 index added 0.6% to 13,047.22, while France's
CAC 40 index gained 0.7% to 5,336.39. The U.K.'s FTSE 100 index
ended 0.2% higher at 7,386.94.
The euro traded at $1.1777, down from $1.1791 late Wednesday in
New York.
What is driving the markets: Traders put the recent selloff on
pause as they assessed the latest round of corporate updates, which
helped boost shares in the likes of Bouygues, British Land and 3i
Group.
Auto maker stocks were also on the rise after data showed new
car sales in the EU grew strongly
(http://www.marketwatch.com/story/eu-new-car-registrations-return-to-growth-2017-11-16-24852759)in
October, rebounding after a dip in September. The Stoxx Europe
Automobiles & Parts Index climbed 0.8%.
Meanwhile, investors are monitoring the prospects for U.S. tax
cuts out of Washington, with the House poised to pass its version
of the tax-code rewrite
(http://www.marketwatch.com/story/house-poised-to-pass-tax-bill-trump-tells-ucla-players-to-thank-chinas-xi-2017-11-16)
Thursday afternoon.
But much work remains to be done. The Senate Finance Committee
unveiled major changes to its tax legislation earlier in the week.
The first Republican senator to come out against the tax plan
emerged Wednesday. The House and any Senate version of the tax
legislation will need to be reconciled.
Read:Stock market 'not even close' to pricing in tax cuts, says
UBS
(http://www.marketwatch.com/story/stock-market-not-even-close-to-pricing-in-tax-cuts-says-ubs-2017-11-15)
What are strategists saying: "After such a long run without any
moves lower, equity markets were probably due a breather and this
looks more like a technical correction before another assault
higher, rather than the start of a more significant selloff," said
Neil Wilson, senior market analyst at ETX Capital, in a note.
"Buying the dip still rules," he added.
However, not everyone was as optimistic.
"On a number of levels, major indices are starting to show signs
of fatigue, with both the Nikkei 225 and the German DAX in
particular looking quite vulnerable to further losses, with the DAX
briefly trading below its October lows yesterday before
rebounding," said Michael Hewson, chief market analyst at CMC
Markets UK, in a note.
"With concerns about high yield credit prompting some
profit-taking along with a recent survey that showed investors
underweight in cash, it wouldn't take much more of a push for
markets to fall even further as portfolio managers start to lock in
profits as we head towards year-end," Hewson said.
Stock movers: Bouygues SA (EN.FR) climbed 5.2%. The French
industrial conglomerate said its nine-month net profit more than
doubled
(http://www.marketwatch.com/story/bouygues-shares-rise-on-higher-profit-guidance-2017-11-16),
buoyed by an increased contribution from its shareholding in Alstom
SA (ALO.FR).
Shares of 3i Group PLC (III.LN) rose 2% after the international
investment manager said it is on track to deliver another strong
year of growth
(http://www.marketwatch.com/story/3i-says-on-track-for-strong-year-of-growth-2017-11-16)
in its private-equity portfolio.
British Land Co. PLC (BLND.LN) added 3.7% after the real-estate
company said it swung to a first-half profit
(http://www.marketwatch.com/story/british-land-swings-to-pretax-profit-2017-11-16).
Among car makers, Volkswagen AG (VOW.XE) (VOW.XE) rose 2.5%,
Fiat Chrysler Automobiles NV (FCA.MI) (FCA.MI) climbed 1.8% and
Renault SA (RNO.FR) gained 1.3%. In other Volkswagen news, the
Germany company said it and its Chinese joint-venture partners will
invest nearly $12 billion by 2025 in developing electric cars for
the market in China.
Shares of GKN PLC (GKN.LN) slid 4.8% after the engineering group
ousted its CEO designate Kevin Cummings amid problems at the
aerospace unit he ran.
Sodexo SA (SW.FR) lost 1.8% after the French food service and
facilities management company offered disappointing guidance.
Economic news: U.K. retail sales dropped 0.3% in October on the
year, but still beat forecasts
(http://www.marketwatch.com/story/uk-retail-sales-rebound-beats-expectations-2017-11-16)
of a 0.5% decline, according to FactSet estimates. Month-on-month
sales rose 0.3%, beating the 0.1% forecast.
The pound turned higher after the data to buy $1.3195, up from
$1.3158 ahead of the report and $1.3170 late Wednesday in New
York.
Eurozone inflation was confirmed at 1.4% in October, down from
1.5% in September.
(END) Dow Jones Newswires
November 16, 2017 12:17 ET (17:17 GMT)
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