EUROPE MARKETS: European Stocks Weighed Down By Bank Shares, But Log Best Week In 2 Months
14 Luglio 2017 - 7:31PM
Dow Jones News
By Carla Mozee, MarketWatch
Euro bulks up more than 1% against the greenback
European stock markets largely finished lower Friday, with bank
shares taking a hit after their U.S. peers kicked off a new
earnings season, but regional equities on the whole marked their
best weekly performance in more than two months.
Benchmarks in Germany, France, Spain, Italy and the U.K. each
closed in the red, but the Stoxx Europe 600 managed to finish
higher by 0.2%, with commodity shares among its advancers.
The pan-European gauge was also aided by Greek stocks, whose
rise left the Athex up 0.3% at 856.47. Investors will watch for any
word on whether the Greek government will return to the bond market
(https://www.wsj.com/articles/european-commission-urges-eu-to-end-disciplinary-measures-against-greece-1499866095)
as early as next week.
For the week, Stoxx 600 finished up by 1.8%, the largest
percentage gain since the week ended May 5, FactSet data show.
Stocks during the week climbed after Federal Reserve Chairwoman
Janet Yellen said U.S. interest rates don't have to rise all that
much further.
Banks: But Friday's session ended with a drop in bank shares
that pulled the Stoxx Europe 600 Banks Index down by 0.7%. European
lenders followed U.S. bank stocks lower
(http://www.marketwatch.com/story/financial-etf-seeing-worst-day-in-2-months-after-weak-bank-results-2017-07-14)
after the release of second-quarter figures from Citigroup Inc. (C)
, J.P. Morgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC)
.
Those big banks each posted higher-than-anticipated profit, but
reported weaker trading revenue, falling short of what analysts had
expected and raising questions about what European lenders will say
about such revenue when they begin releasing financial results in
the coming weeks.
Among major European banks, shares of Deutsche Bank AG (DBK.XE)
(DBK.XE) and Banco Santander SA (SAN) (SAN) each fell 0.9%, as did
shares of BNP Paribas SA (BNP.FR).
Bank stocks will be back in focus next week when the European
Central Bank releases its next policy decision on Thursday.
"At a time when more central banks are talking about retreating
from QE, a more hawkish European Central Bank would also be
positive for European banks, with a focus on how quickly and by how
much rates could go up," said analysts at UBS in a research note
published Friday.
Increases in short-term lending rates by central banks should
lead to higher profit margins for banks.
Euro pops higher: Yellen did say that inflation would be a
factor the Fed's plan to gradually raise rates. But U.S.
consumer-price inflation and retail sales figures released Friday
fell short of expectations. That send the dollar spiraling lower
(http://www.marketwatch.com/story/dollar-trades-in-tight-ranges-as-traders-eye-key-inflation-report-2017-07-14)
and the euro leaping by more than 1%. A stronger euro can reduce
revenue for European companies that sell their goods and services
overseas.
Read:What inflation? Consumer prices flat in June, CPI shows
(http://www.marketwatch.com/story/inflation-goes-nowhere-in-june-cpi-shows-2017-07-14)
The euro climbed to $1.1459, up from $1.1399 late Thursday in
New York.
Stock movers: Skanska AB (SKA-B.SK) fell 6.2% after the Swedish
construction company said it's writing down roughly 780 million
Swedish kronor ($934 million) in certain U.S. and U.K. operations
in the second quarter. Operating income for the period is expected
at 1.5 billion Swedish kronor, down from 1.7 billion Swedish kronor
in the year-ago period.
National indexes: Germany's DAX 30 index closed 0.1% lower at
12,631.72, and France's CAC 40 index turned fractionally lower to
end at 5,235.31. The U.K.'s FTSE 100 index fell 0.5% to 7,378.39
(http://www.marketwatch.com/story/stronger-pound-holds-ftse-100-back-for-2nd-day-2017-07-14).
Spain's IBEX 35 shed 3.2 points at 10,655.10 and Italy's FTSE
MIB closed Friday's session down 0.1% at 21,492.29.
(END) Dow Jones Newswires
July 14, 2017 13:16 ET (17:16 GMT)
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