By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks lost ground Wednesday,
with LM Ericsson AB among the decliners pulling the region's
benchmark index back from its hefty gain in the previous
session.
The Stoxx Europe 600 shed 0.6% to 335.05, handing back a portion
of Tuesday's 1.4% jump that was led by a rally in drug makers. The
decline followed three-straight days of wins for the index.
Investors on Wednesday received a better-than-expected reading
for euro-zone manufacturing activity in April, but stocks remained
lower after the data. An initial reading of Markit's manufacturing
Purchasing Managers' Index came in at 53.3, a three-month high that
surpassed expectations for a 53.0 reading.
In country-specific breakdowns of activity, "there were upside
surprises on the German PMIs, but disappointment in the
corresponding French indices," said James Ashley, chief European
economists at RBC Capital Markets in a review of the data.
From the perspective of the European Central Bank, the PMIs "are
certainly not strong enough to preclude any ECB intervention if
other economic indicators disappoint ... but the news from today's
surveys is, on balance, moderately encouraging," said Ashley.
Germany's DAX 30 finished 0.6% lower at 9,544.19, and France's
CAC 40 declined 0.7% to 4,451.08. The U.K.'s FTSE 100 edged down
0.1% to 6,674.74. Read Matthew Lynn's opinion column on
overvaluation of French equities.
Ericsson shares struggled Wednesday, falling 6.1% after the
Swedish mobile-network company posted an unexpectedly sharp decline
in quarterly revenue to 47.51 billion Swedish kronor ($7.21
billion), from 52.03 billion kronor a year earlier. That missed a
consensus projection from analysts of 50.80 billion kronor.
ARM Holdings PLC shares dropped 2.8% as the computer-chip
designer was unable to gain traction after reporting a rise in
first-quarter profit. Included in that report was 3% year-over-year
growth in royalty revenue to $144.5 million, compared with 32%
growth in the year-ago quarter.
But shares of Drax Group PLC lost the most on the Stoxx 600
index. They sank 12.1% after one of the British power generator's
projects was left off a government list of renewable energy
projects eligible for a new system of subsidies. Drax plans to
launch legal action to contest the decision, saying the government
told it late last year that support for two of its units scheduled
for coal-to-biomass conversion in northern England would be
available.
Meanwhile, the session's stock winners were paced by an 8.8%
leap in Associated British Foods PLC as the company plans to open
Primark stores in the northeastern region of the U.S. AB Foods said
strength from clothing retailer Primark and grocery units aided in
a rise in half-year profit.
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