EUROPE MARKETS: European Stocks Waver As Traders Digest Weak Inflation Data
March 16 2018 - 8:58AM
Dow Jones News
By Sara Sjolin, MarketWatch
Germany's DAX reopens after connectivity glitch
European stock markets struggled for direction on Friday, as
traders absorbed reports of another impending prominent departure
from the U.S. administration, fueling worries about uncertainty in
the White House, and disappointing inflation data for the
eurozone.
What are markets doing?
The Stoxx Europe 600 index was up 0.1% at 377.39, but switching
between small gains and losses. The benchmark on track for a 0.3%
weekly decline.
Germany's DAX 30 index rose 0.2% to 12,361.98. Trading in
Frankfurt opened about 40 minutes late on Friday
(http://www.marketwatch.com/story/germanys-dax-to-reopen-after-unknown-glitch-2018-03-16)
after a connectivity issue that prevented equal access for market
participants to the trading system.
France's CAC 40 index was marginally higher at 5,268.47, while
the U.K.'s FTSE 100 was up 0.1% at 7,149.88
(http://www.marketwatch.com/story/ftse-100-trudges-higher-but-home-builders-keep-a-lid-on-bigger-gains-2018-03-16).
What is driving the market?
Turmoil in the Trump administration has added to volatile trade,
with the U.S. president expected to fire his national security
adviser H.R. McMaster
(http://www.marketwatch.com/story/trump-poised-to-push-mcmaster-out-of-the-white-house-2018-03-16),
according to news reports, which would be the second high-profile
firing from the White House this week. Secretary of State Rex
Tillerson was replaced with Central Intelligence Agency Director
Mike Pompeo on Tuesday.
White House press secretary Sarah Huckabee Sanders dismissed
that suggestion in a tweet late Thursday, but administration
officials have reportedly confirmed it.
(https://twitter.com/PressSec/status/974468508074565632)
Concerns over a possible trade war between the U.S. and key
trading partners were still weighing on investors' minds as well,
analysts said. The White House said on Wednesday it will seek to
trim the U.S.'s trade deficit with China by $100 billion, using
tariffs. The European Union, meanwhile, was working to get the bloc
exempt from the tariffs.
Closer to home, eurozone inflation data were in focus. Eurostat,
the statistical office of the European Union, said inflation in the
currency union fell to 1.1% in February
(http://www.marketwatch.com/story/eurozone-inflation-falls-misses-forecasts-2018-03-16),
down from an initial estimate of 1.2% and weaker than the 1.3%
recorded in January. Weaker inflation could deter the European
Central Bank from rolling back its aggressive quantitative-easing
program later this year.
The euro slightly pared its gain after the report, buying
$1.2324, compared with as high as $1.2337 ahead of the data. The
euro fetched $1.2306 late Thursday in New York.
Which stocks are in focus?
Shares of Siemens Healthineers AG rose 3.1% as the stock made
its market debut on the Frankfurt Stock Exchange
(http://www.marketwatch.com/story/siemens-healthineers-shares-rise-on-market-debut-2018-03-16-648579).
NEX Group PLC (NXG.LN) rallied 30% to GBP8.99 after confirming
that it's received a preliminary takeover approach from CME Group
Inc
(http://www.marketwatch.com/story/nex-confirms-takeover-approach-by-cme-2018-03-16).
(CME).
Altice NV (ATC.AE) rose 1.6% after the debt-laden telecoms
company late Thursday said underlying earnings rose in the fourth
quarter and that it was seeing some recovery in the French
market.
Berkeley Group Holdings PLC (BKG.LN) dropped 3.7% as the home
builder said while trading conditions in London and the southeast
of the U.K. remain stable it doesn't plan to step up building.
(http://www.marketwatch.com/story/berkeley-projects-no-increase-in-production-2018-03-16)
What are strategists saying?
-- "Traders are continuing to tread lightly as worries about a
possible trade war are still doing the rounds. Traders are
tip-toeing around this morning as there is talk that President
Trump will target China with tariffs. While no new developments
have taken place, some bargain hunters are stepping in," said David
Madden, market analyst at CMC Markets UK, in a note.
-- "The latest [inflation] data only strengthens the belief that
we will see significant monetary policy divergence between the U.S.
and eurozone this year," said Jacob Deppe, head of trading at
Infinox, in a note.
"In fact, monetary policy could open a new front in a
U.S./eurozone trade war. European exports, reliant on a cheap Euro,
will benefit from a continuing dovish monetary policy," he
added.
(END) Dow Jones Newswires
March 16, 2018 08:43 ET (12:43 GMT)
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