By Carla Mozee, MarketWatch
Altice reportedly considers selling one of its units
European stocks largely sought firm direction Thursday, but
French blue-chip shares climbed as data showed the country was a
key contributor to strengthening activity in the eurozone's economy
this month.
How key gauges are moving: The Stoxx Europe 600 was up less than
1 point at 387.14 in what's been a topsy-turvy session for European
equities. The index has risen as much as 0.2% and has lost as much
as 0.6% intraday. The financial and utilities sectors were in the
red but industrial and technology shares led advancers.
Volumes were expected to be lower as U.S. markets are closed for
the Thanksgiving Day holiday. On Wednesday, the Stoxx 600 fell 0.3%
(http://www.marketwatch.com/story/ftse-100-on-course-for-3rd-straight-gain-with-uk-budget-on-deck-2017-11-22),
snapping a two-day run of gains.
In Paris, the CAC 40 sloughed off losses and rose 0.6% to
5,383.04.
In Frankfurt, the DAX 30 index has moved between gains and
losses and recently shed 0.1% to 12,996.31. Attention was turning
to whether Germany Chancellor Angela Merkel would form a grand
governing coalition with the Social Democratic Party, led by Martin
Schulz.
In Madrid, the IBEX 35 picked up 0.6% to 10,070.60 while in
London, the FTSE 100 index fell 0.1% to 7,409.95, but traded up
from its session low.
The euro bought $1.1846, up from $1.1824 late Wednesday in New
York.
What's driving markets: Major equity benchmarks either pared
losses or turned higher as the session wore on after a preliminary
reading on eurozone economic activity exceeded expectations.
Figures showed Germany's economic growth had expanded and French
manufacturing confidence hit a decade high.
Stocks opened lower, with the euro strength acting as a headwind
and as investors assessed the worst selloff in Chinese equities in
about three months.
The euro started to leap late Wednesday as the U.S. dollar was
yanked down by investors who questioned the potential pace of U.S.
interest-rate hikes. Minutes released from the Federal Reserve's
meeting this month showed policy makers have grown more concerned
about persistently low inflation levels.
(http://www.marketwatch.com/story/fed-doubts-on-inflation-grow-but-rate-hike-likely-soon-minutes-show-2017-11-22)
A stronger euro can make products from European exporters more
expensive to purchase for their overseas clients who use other
currencies, so a rising euro can put pressure on shares of such
companies.
The trading session also got underway with traders seeing there
was a rout in Chinese equities that left the Shanghai Composite and
the Shenzhen Composite down 2.3% and 2.9%, respectively.
The selloff was sparked as Beijing took steps to halt the
proliferation of small online lenders
(http://www.marketwatch.com/story/chinese-stocks-fall-other-asian-markets-mostly-quiet-2017-11-22)
after saying it plans to streamline oversight of asset-management
products sold by financial institutions.
What strategists are saying: Traders "are keeping an eye on the
outcome of the meeting between [German] President Steinmeier and
SPD leader Schulz," said Naeem Aslam, chief market analyst at Think
Markets, in a note.
"German party leaders do feel that they have a responsibility to
form a government and the SPD leader has said that he is open for
another round of talks with Merkel," he said. "If we do see more
tangible progress which helps Merkel to finally form a coalition,
we do think that the euro could move higher and the EUR/GBP could
surpass the mark of GBP0.90."
"The German economy is currently showing its best performance
over such a long period since the mid-1990s," said Carsten Brzeski,
chief economist at ING, in a note.
"In the short term, the impact from the current political
impasse on the German economy should be (close to) zero," he said.
"For the longer term, however, given the lack of structural reforms
and the urgent need for investments in digitalization and
education, German politicians should not waste too much time if
they don't want to put the economy's future at risk."
Stock movers: Centrica PLC shares (CNA.LN) plunged 15% to the
bottom of the Stoxx 600, after the parent company of British Gas
warned that its energy supply businesses have had a disappointing
second half
(http://www.marketwatch.com/story/centrica-says-on-track-to-hit-2017-targets-2017-11-23).
It also gave a full-year adjusted earnings outlook that was below
the market consensus.
Thyssenkrupp AG (TKA.XE) rose 2% as the German conglomerate's
fiscal 2017 adjusted earnings before interest and taxes rose 30% to
EUR1.91 billion, exceeding a FactSet consensus forecast of EUR1.74
billion.
Altice NV shares (ATC.AE) jumped 5.8% following a Financial
Times report that the French telecommunications company is seeking
to sell its telecom network in the Dominican Republic.
Remy Cointreau SA (RCO.FR) fell 3.3% even as the company said
first-half net profit rose to EUR89.2 million ($105 million) on
stronger sales of its Remy Martin cognac
(http://www.marketwatch.com/story/remy-cointreaus-earnings-lifted-by-cognac-sales-2017-11-23).
Economic data: A purchasing managers index for the eurozone rose
to 57.5 in November
(http://www.marketwatch.com/story/eurozone-business-booming-as-pmis-jump-2017-11-23)from
56.0 in October, reaching its highest level in more than six years,
said data firm IHS Markit. Economists widely expected an unchanged
reading. France contributed to the upside surprise as its services
sector PMI jumped to 60.2 from 57.3.
Germany's Destatis statistics agency said Thursday. Gross
domestic product grew at a quarter-to-quarter rate of 0.8%
(http://www.marketwatch.com/story/german-economy-picked-up-speed-in-3q-2017-11-23)
in the three months through September, or 3.3% in annualized terms,
confirming preliminary growth estimates.
France's statistics bureau Insee said its monthly measure of
manufacturing confidence rose one point to 112 in November
(http://www.marketwatch.com/story/french-manufacturing-confidence-at-decade-high-2017-11-23-34855653),
in line with economists' expectations as well as setting a fresh
decade high.
(END) Dow Jones Newswires
November 23, 2017 07:57 ET (12:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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