By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stocks inched up on Wednesday,
with peripheral markets such as Portugal and Spain again posting
the strongest gains, as investors looked ahead to regional data as
well as minutes from the U.S. Federal Reserve, due later in the
day.
The Stoxx Europe 600 index rose 0.1% to 329.78. The index closed
at 329.40 on Wednesday, its highest closing value since May 19,
2008. The move was driven by upbeat German unemployment data and
falling European borrowing costs, which were reflected in bond
prices.
Among stocks on the move, shares of Akzo Nobel NV fell 2% after
the Dutch painting and chemicals company said it would continue to
cut costs in 2014 and kept its outlook for 2013.
Shares of Scor SE fell 3% after the global reinsurer was cut to
neutral from overweight at J.P. Morgan Cazenove, where analysts
said the sector is in a soft cycle that will slow earnings growth
for those companies. While Scor is best-placed to offset this with
lower hedging costs, the analysts said, they cut earnings-per-share
forecasts for it by 8% for 2014 and 4% for 2015, and reduced
dividend forecasts.
Shares of Air France-KLM SA rose nearly 5% after the airline
reported a rise in passenger traffic of 2.1% and a load factor rise
of 0.9 points. The unit revenue per available seat-kilometer was
"resilient," the company said.
European stocks will get two more data points on Wednesday:
euro-zone retail sales and German industrial production. And on
Thursday, the European Central Bank holds its monthly meeting, with
some speculating that ECB President Mario Draghi may have to take a
dovish tone, given the single-currency zone saw another fall in
inflation a day earlier.
The rally for Europe stocks on Wednesday was fueled by upbeat
German employment numbers and falling borrowing costs across
Europe's periphery, which helped lift the Spain IBEX 35 index to
its best levels since mid-2011. The IBEX was up another 0.6% to
10,241.50 on Thursday, while the yield on Spain's 10-year
government bond hovered at the lowest levels since December
2009.
Portugal's PSI 20 rose 1.3% to 7,050.11, led by a 4% rise for
Banco Espirito Santo SA
Among other indexes, the German DAX 30 index fell 0.2% to
9,503.32, and the French CAC 40 index was flat at 4,264.12.
One index in the red on Wednesday was the FTSE 100 , off 0.2% to
6,738.86 The Halifax House Price index showed a drop of 0.6% in
December, the first decline in a year.
Among the heavyweights, shares of British American Tobacco PLC
fell 1.3%.
Away from the main indexes, shares of Mothercare PLC tumbled 28%
after a profit warning. The international mother-and-baby goods
retailer said worldwide network sales fell 4.4% in the 12 weeks to
Jan. 4, with the U.K. hit particularly hard by promotional sales
over the Christmas period. Mothercare's chief executive, Simon
Calver, said the company remains cautious looking forward and
full-year profits will likely be below the current range of market
expectations.
U.S. stock futures were flat as investors awaited the Fed
minutes of its Dec. 18 meeting, which will come after the close of
European markets. The U.S. also has ADP employment data on tap for
later, which precedes Friday's all-important nonfarm-payrolls
data.
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