By Carla Mozee, MarketWatch
Corporate financial updates help buoy market; U.K. Spring
Statement also in focus
European stocks edged higher Tuesday, kept aloft by
well-received financial updates from utility E.ON and others.
Traders were looking ahead to the release of data on U.S.
consumer prices and the U.K.'s Spring Statement on public
finances.
Inflation data has been a big driver of action across global
equity markets this year, as investors assess what any rise means
for the U.S. Federal Reserve's path for interest rate hikes.
How markets are moving
The Stoxx Europe 600 index rose 0.1% to 379.54. The oil and gas
group and basic materials sector rose, but the telecom and tech
groups were lower. On Monday, the pan-European index added 0.3%
(http://www.marketwatch.com/story/european-stocks-aim-for-6th-straight-win-buoyed-by-us-jobs-data-and-utility-shares-2018-03-12)
as a complex deal between German utilities lifted that sector.
Pressure on the European benchmark came from U.K. blue chips, as
the FTSE 100 indexremained flat
(http://www.marketwatch.com/story/ftse-100-steady-ahead-of-uk-spring-statement-us-inflation-data-2018-03-13)
at 7,215.05.
Germany's DAX 30 index was up 0.2% at 12,439.44, and France's
CAC 40 index gained 0.5% to 5,301.40. Spain's IBEX 35 put in the
strongest performance, rising 0.8% to 9,805.80.
The euro bought $1.2329, slightly lower than $1.2337 late Monday
in New York.
What is driving the market
Investors are focused on the report on U.S. consumer prices in
February, after global equity markets sold off last month on
worries about the rate of growth. The concern is that a faster pace
of U.S. inflation will prompt the Fed to raise interest rates four
times this year, instead of the three anticipated. That implies a
rise in the costs of borrowing for companies worldwide.
Check out:What to watch in the CPI report
(http://www.marketwatch.com/story/what-to-watch-in-the-cpi-report-2018-03-12)
And see:Inflation is rattling markets -- here's what you should
know about it
(http://www.marketwatch.com/story/buckle-up-theres-a-lot-more-to-inflation-than-the-price-of-goods-2018-02-21)
The U.S. inflation reading is forecast to come in at 0.2%,
compared with 0.5% in January, owing to lower gasoline prices. The
report is due at 8:30 a.m. Eastern Time, or 12:30 p.m. London
time.
The eurozone's final reading of consumer price inflation for
February is scheduled for release on Friday.
What strategists are saying
"Well-received corporate results and a tough stance against
protectionism have been an aspirin for Europe's Trump tariff
headache. The Xetra DAX benefited from solid results by German
utilities firms," said Jasper Lawler, London Capital Group's head
of research, in a note.
"A little apprehension about the U.K. Spring Statement has held
back the FTSE 100. Chancellor Phillip Hammond has rejigged the
Spring Statement as a non-event with no tax or spending changes to
be announced. The only hope for a market reaction will be to the
new OBR forecasts, which are expected to revised higher," he
said.
Stocks in focus
E. ON SE shares (EONGY) jumped 6% as the German utility said it
will raise its dividend, and said it swung to a yearly net profit
(http://www.marketwatch.com/story/eon-swings-to-profit-partly-on-lower-tax-rate-2018-03-13)of
EUR3.93 billion ($4.85 billion), aided by a reduced tax rate. E.ON
also said it expects to cut around 5,000 jobs during the
integration of Innogy SE (IGY.XE) , which it will take over through
an asset-swap deal with RWE AG.
RWE shares (RWE.XE) rose 1.4% after the utility said it swung to
a 2017 net profit
(http://www.marketwatch.com/story/rwe-swings-to-net-profit-in-2017-2018-03-13).
Actividades de Construccion y Servicios SA (ACS.MC) rose 2.2% in
Madrid following reports late Monday the company and Italy's
Atlantia SpA (ATL.MI) are close to reaching a preliminary deal to
take joint control of Spanish infrastructure firm Abertis
Infraestructuras SA (ABE.MC) . Reuters
(https://www.reuters.com/article/us-abertis-m-a-atlantia/atlantia-acs-close-to-deal-on-joint-control-of-abertis-italian-sources-idUSKCN1GO24T)
quoted two Italian sources as saying an agreement is near. Atlantia
shares were up 0.1%
Antofagasta PLC (ANTO.LN) shares rose 2.5% after the copper
producer posted a more than fourfold rise in 2017 net profit
(http://www.marketwatch.com/story/antofagasta-2017-profit-soars-on-copper-price-rise-2018-03-13).
TP ICAP PLC (TCAP.LN) fell 6.9%, trading at the bottom of the
Stoxx 600, as the interdealer broker posted a decline in 2017
pretax profit
(http://www.marketwatch.com/story/tp-icap-posts-lower-pretax-profit-shares-fall-2018-03-13),
to GBP72 million ($99.9 million) from GBP167 million a year
ago.
Iliad SA shares (ILD.FR) pulled back 7%, with the French
telecommunications company's 2017 earnings report showing net
profit was essentially flat
(http://www.marketwatch.com/story/iliad-yearly-profit-flat-despite-rise-in-revenue-2018-03-13)
despite a 5.6% rise in revenue that was largely driven by its
mobile business.
Direct Line Insurance Group PLC (DLG.LN) shares fell 1.7% after
Deutsche Bank downgraded the car and property insurer's rating to
hold from buy.
What's on the economic docket
In addition to the U.S. inflation data, traders will watch for
the U.K. Spring Statement on public finances, scheduled for
delivery in parliament by Chancellor of the Exchequer Philip
Hammond at 12:30 p.m. London time, or 8:30 a.m. Eastern Time.
The statement should include the Office for Budget
Responsibility's economic growth forecasts and a cut in the
estimate for how much the government will need to borrow in
2017-2018.
In addition, the OBR is expected to provide an estimate on how
public finances will be affected by payments the U.K. will make to
the European Union as a result of Brexit.
(END) Dow Jones Newswires
March 13, 2018 06:41 ET (10:41 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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