EUROPE MARKETS: German Stock Market Slides By The Most In 3 Weeks As Euro Leaps
18 Luglio 2017 - 06:53PM
Dow Jones News
By Carla Mozee, MarketWatch
German sentiment declines; Ericsson plunges; Greece delays
tapping debt market
Stocks across Europe dropped on Tuesday, with the exporter-heavy
DAX 30 index ending 1.3% lower at 12,430.39--its worst session
since June 29.
More broadly, European benchmarks finished the session under
pressure as the euro stepped up to a 14-month high against the U.S.
dollar and as disappointing corporate earnings reports rolled in.
The euro climbed to $1.1574 from $1.1479 late Monday, notching an
intraday high of $1.1585. A stronger euro can hurt European
exporters as it makes products more expensive for overseas
customers.
The Stoxx Europe 600 slumped 1.1% to end at 382.58, the largest
percentage decline since June 29, FactSet data showed. All sectors
closed in the red, led by tech and basic material shares.
Investors began dumping equities when the session started, after
Republican leaders in the U.S. Senate late Monday ditched their
bill to repeal and simultaneously replace
(http://www.marketwatch.com/story/health-care-overhaul-seems-sunk-as-two-more-republicans-oppose-senate-bill-2017-07-17)
much of the Affordable Care Act, or "Obamacare."
That seemed to rattle investors' faith that President Donald
Trump would be able to push through his pro-growth agenda, and the
ICE Dollar Index was pushed back to levels not seen since September
2016.
"Without a successful repeal of the Obamacare legislation, [U.S.
President Donald] Trump will have trouble financing his own plans
making it very difficult to see how the dollar can remain bullish,"
said ADS Securities researcher Konstantinos Anthis in a note.
European equities were among those that had rallied after
Trump's election in November on the prospect that plans for higher
fiscal spending and lower corporate taxes would benefit European
companies.
Earnings season: Ericsson shares (ERIC) tumbled nearly 15.6%.
The sharpest slide since October 2016 was prompted by the Swedish
telecom-equipment maker swinging to a bigger-than-expected net loss
(http://www.marketwatch.com/story/ericsson-swings-to-loss-vows-to-step-up-cost-cuts-2017-07-18)
of 1.01 billion Swedish kronor ($122.3 million) in the second
quarter. The company warned that earnings could weaken further as
the market continues to struggle.
Zalando SE (ZAL.XE) shares sank 8.3%, the deepest decline since
June 2016. The German online retailer's sales growth slowed in the
second quarter, according to a preliminary earnings report.
But shares in Novartis AG (NOVN.EB) moved up 0.4% after the
Swiss drug maker reported a slight gain in second quarter net
income
(http://www.marketwatch.com/story/novartis-income-falls-but-beats-expectations-2017-07-18).
IG Group Holdings PLC (IGG.LN) rallied 16.4% after the
spreadbetting company said full-year pretax profit has increased
(http://www.marketwatch.com/story/ig-group-profit-up-as-client-numbers-gain-2017-07-18)
and that there has been no adverse impact from a U.K. regulator's
recent proposals to reform the asset management market.
The Stoxx 600 Bank Index sank 1.6%, falling along with U.S.
lenders after investment bank Goldman Sachs Group Inc. (GS) posted
a 40% fall in its key trading business.
(http://www.marketwatch.com/story/goldman-sachs-stock-slips-as-trading-slumps-2017-07-18)
Individual indexes: France's CAC 40 index gave up 1.1% to close
at 5,173.27, and Spain's IBEX 35 was pushed lower by 1.2% to
10,524.50.
Italy's FTSE MIB shed 0.6% at 21,358.20. The U.K.'s FTSE 100
closed 0.2% lower at 7,390.22.
(http://www.marketwatch.com/story/ftse-100-drops-as-us-dollars-slide-boosts-pound-2017-07-18)
Greece's Athex Composite fell 1.2% to 848.07. The Greek
government postponed plans to issue new debt in the global bond
market
(http://www.ekathimerini.com/220152/article/ekathimerini/business/bond-issue-is-shelved-for-now)
as it waits for a debt sustainability analysis from the
International Monetary Fund, according to Greek daily Kathimerini.
The mid-yield on Greece's current 10-year bond fell 4 basis points
to 5.21% as prices rose, but the yield earlier climbed to 5.52%,
according to Tradeweb data.
ECB and euro: "With the euro having broken above multi-months
highs it will be key to see whether the single currency holds on to
its gains ahead of the European Central Bank meeting on Thursday,"
Anthis said.
ECB President Mario Draghi is expected to be pleased with the
progress of the euro area and attempt to prepare the markets for
reduced stimulus from the ECB in the months to come, so the shared
currency could trade with a positive bias going into the central
bank's meeting, he added.
Data: German economic sentiment dropped in July
(http://www.marketwatch.com/story/german-economic-sentiment-drops-in-july-zew-2017-07-18),
according to the ZEW think tank, but the outlook for Europe's
largest economy continues to be favorable.
The pace of U.K. inflation eased unexpectedly in June, to 2.6%
(http://www.marketwatch.com/story/uk-inflation-slows-unexpectedly-in-june-2017-07-18),
the Office of National Statistics said.
(END) Dow Jones Newswires
July 18, 2017 12:38 ET (16:38 GMT)
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