EUROPE MARKETS: European Bourses End The Session In The Red As Global Stocks Turn Lower
18 Ottobre 2018 - 7:32PM
Dow Jones News
By Mark DeCambre, MarketWatch , Anneken Tappe
Novartis announces billion-dollar pharmaceutical deal
Europe's main equity benchmarks finished Thursday's session
lower after spending much of the day trading higher thanks to
better-than-expected corporate results.
But Europe appeared unable to a turn lower in U.S. stocks led by
technology and communication-services
(http://www.marketwatch.com/story/dow-tumbles-350-points-as-technology-and-communication-services-stocks-tank-in-midday-trade-2018-10-18).
What are markets doing?
The pan-European Stoxx Europe 600 closed down 0.5% at 361.67
(http://www.marketwatch.com/story/european-stocks-see-bounce-but-on-track-for-big-weekly-declines-2018-10-12),
while the U.K.'s FTSE 100 slipped to close 0.4% down at 7,026.99,
as Brexit worries continued to influence trade. For both benchmarks
it was the worst point and percentage drop in a week.
Germany's DAX 30 was off 1.1% at the end of Thursday trading,
reading 11,589.21 points, and France's CAC 40 fell 0.6% to 5,116.79
by the closing bell.
Italy's FTSE MIB Italy index ended 1.9% down at 19,087.53, amid
turmoil over the country's budgetary negotiations with the European
Union.
The euro last traded at $1.1470, compared with $1.1502 late
Wednesday in New York. The British pound was meanwhile down at
$1.3043 from $1.3114.
Read: With 'no-deal' Brexit risk on the rise, analysts see
uncertain path for pound
(http://www.marketwatch.com/story/with-no-deal-brexit-risk-on-the-rise-analysts-see-uncertain-path-for-pound-2018-10-16)
What is driving the market?
Market participants pointed to strength in a recent spate of
earnings as one reason that European equity indexes were tracking
slightly higher earlier in the session. But European stocks, which
commonly take clues from the U.S. stock market, finished the day
lower after U.S. equities turned red led by technology and
communication-services names. On top of that, concerns around
Britain's continuing efforts to extricate itself from the EU, which
appear to have been delayed amid a border impasse.
U.K. Prime Minister Theresa May on Wednesday during a closely
watched summit in Brussels suggested that she was considering an
extended Brexit transition period as the British leader failed to
forge a new trade and customs pact as Britain is set to exit from
the EU in March. An extension could see Britain remain under EU
rules until 2021 or longer, according to reports.
A so-called no-deal scenario
(http://www.marketwatch.com/story/with-no-deal-brexit-risk-on-the-rise-analysts-see-uncertain-path-for-pound-2018-10-16)
is looking increasingly likely European Council President Donald
Tusk said earlier in the week, saying he harbored "no grounds for
optimism (https://www.bbc.co.uk/news/uk-politics-45871254)." A
no-deal could roil eurozone markets and produce sharp swings in the
British pound.
Meanwhile, investors also watched discussions between
antiestablishment 5 Star Movement and the far-right League over a
full draft budget law that will be sent to the Italian parliament
by Saturday, but which is expected to draw anger from EU officials
because it would increase the country's deficit and run afoul of EU
fiscal rules. European Central Bank head Mario Draghi was quoted as
saying that member states who didn't respect the EU rules were
risking high costs for everyone, according to Reuters.
What are strategists saying?
"Meanwhile in the eurozone, besides Brexit, Italy's spending
plans is another worrying issue for traders as recent comments from
EU officials including the president of the European Commission,
Jean-Claude Junker downplayed hopes for a breakthrough," wrote
Christina Parthenidou, investment analyst at XM in a Thursday
research note.
What stocks are moving
Shares of Paris-based Carrefour SA(CA.FR) led pan-European
gainers, ending the session more than 9% higher, after the
supermarket company reported better-than-expected third-quarter
sales
(http://www.marketwatch.com/story/carrefour-shares-surge-after-sales-update-2018-10-18).
LM Ericsson AB (ERIC-B.SK) closed up 6.2% after the Swedish
telecom gear maker beat estimates amid "momentum" for the 5G market
(http://www.marketwatch.com/story/ericsson-beats-estimates-as-5g-gains-pace-2018-10-18).
Unilever PLC's (ULVR.LN) stock meanwhile slipped to end Thursday
0.9% lower even as the maker of Breyers ice cream and Dove shampoo
sold more products at higher prices, helping it deliver stronger
third-quarter revenue growth
(http://www.marketwatch.com/story/unilever-revenue-up-on-better-volumes-pricing-2018-10-18).
Novartis AG(NOVN.EB) raised its outlook on Thursday, and
announced it would acquire radiopharmaceuticals company
(http://www.marketwatch.com/story/novartis-lifts-view-announces-21b-endocyte-deal-2018-10-18)
Endocyte Inc. (ECYT) in a deal that values it at $2.1 billion,
Novartis's latest effort to transform into a focused-medicines
company. Novartis shares rose 1.9%.
(END) Dow Jones Newswires
October 18, 2018 13:17 ET (17:17 GMT)
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