By Carla Mozee, MarketWatch
AB Foods shares drop after financial update
European stocks notched modest gains Thursday, with shares of
key miners rising after the release of upbeat economic growth and
industrial output data from major trading partner China.
But U.K. equities were a source of pain, as traders fretted
about the health of the British real-estate market and as shares of
Primark owner AB Foods took a knock after a financial update.
How markets are moving: The Stoxx Europe 600 index picked up
0.1% to reach 398.35, as technology, and oil and gas led advancing
sectors. But groups considered defensive -- telecoms, utility and
health care -- were in the red.
On Wednesday, the pan-European gauge slipped 0.1%
(http://www.marketwatch.com/story/european-stocks-follow-wall-street-into-the-red-as-burberry-falls-short-2018-01-17).
Germany's DAX 30 index picked up 0.4% to 13,231.94, and France's
CAC 40 was 0.1% higher at 5,503.66.
But Spain's IBEX 35 lost 0.2% to 10,457.40, while the U.K.'s
FTSE 100 index shed 0.3% to hit 7,705.22.
The euro bought $1.2207, down from $1.2218 late Wednesday in New
York.
What's driving markets: European stocks were seen as getting a
boost from fresh economic data out of China, which is the European
Union's second-largest trading partner.
Official figures showed the world's second-largest economy grew
6.9% in 2017,
(http://www.marketwatch.com/story/chinese-economy-grew-69-on-year-in-2017-2018-01-18-4485739)
beating Beijing's target of 6.5%. Industrial output accelerated
(http://www.marketwatch.com/story/china-industrial-output-rises-62-beating-views-2018-01-18)
in December, but retail sales slowed.
Traders in European equities may also be heartened by a winning
session for U.S. stocks Wednesday, when the Dow Jones Industrial
Average gained more than 300 points to break through the 26,000
milestone. But Wall Street stock futures are signalling a lower
start Thursday.
The euro was little changed. The shared currency jumped to a
three-year high against the dollar earlier this week, prompting
several European Central Bank officials to express concerns that
the strong euro is putting downward pressure on inflation.
ECB policy maker Ewald Nowotny said on Wednesday that the euro
strength is "not helpful," while ECB Vice President Vítor
Constâncio told Italian newspaper la Republica that monetary policy
could stay "very accommodating for a long time."
Strength in the euro can hurt shares of European exporters, as
it cuts into the revenue and profit made in other currencies once
exchanged.
Traders in European equities may also be heartened by a winning
session for U.S. stocks
(http://www.marketwatch.com/story/dow-futures-point-to-triple-digit-gain-and-fresh-push-toward-26000-2018-01-17)Wednesday,
when the Dow Jones Industrial Average gained more than 300 points
to close above 26,000 for the first time. But Wall Street stock
futures are signalling a lower start Thursday.
What strategists are saying: "A small beat in China's
fourth-quarter GDP number removes a potential banana skin," said
Lee Wild, head of equity strategy at Interactive Investor.
"That the Chinese economy registered its first year-on-year
growth since 2010, and the fastest growth in two years, is a
bullish flag for both the global economy and equity markets," Wild
said in a note.
Stock movers: Associated British Foods PLC shares (ABF.LN)
dropped 2.5%, after the company said a revenue from its sugar
business
(http://www.marketwatch.com/story/ab-foods-revenue-up-as-primark-offsets-sugar-fall-2018-01-18)
fell, though this was offset by an increase at its Primark
fast-fashion arm.
Shares of miners, which count China as a major buyer, were
mostly higher. Glencore PLC (GLEN.LN) was up 0.6%, while Rio Tinto
PLC (RIO) (RIO) (RIO) added 0.4%.
Shares of British online real estate listings firm Rightmove PLC
(RMV.LN) fell 2.1%, tracking a 17% slide in shares of Countrywide
PLC (CWD.LN) after the U.K. real-estate agent forecast a 9% drop in
2017 profit
(http://www.marketwatch.com/story/countrywide-slumps-17-after-disappointing-q4-performance-2018-01-18).
Whitbread PLC (WTB.LN) shares pushed up 2.2% as the company,
which runs the Costa Coffee and Premier Inn brands, said it's on
track to meet its full-year expectations.
Economic data:U.K. house prices bounced back in December
(http://www.marketwatch.com/story/uk-house-prices-bounce-back-rics-survey-2018-01-18),
with the Royal Institution of Chartered Surveyors saying its
monthly reading came in at a plus 8. Analysts polled by The Wall
Street Journal expected, on average, the index to slip further, to
minus 2.
(END) Dow Jones Newswires
January 18, 2018 06:15 ET (11:15 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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