European shares flat as focus turns to ECB amid rising euro
Reuters
Published Jan 25, 2018 09:28
European shares flat as focus turns to ECB amid rising euro
By Julien Ponthus
LONDON (Reuters) - European shares recouped early trading losses and were broadly flat on Thursday as investors waited to see how the European Central Bank would react to a fast-rising euro, which hit the continent's stocks during the previous session.
At 0920 GMT, the pan-European STOXX 600 (STOXX) index unchanged, while Germany's exporter-heavy DAX (GDAXI) fell 0.1 percent and France's CAC 40 (FCHI) edged up 0.2 percent.
"We expect (ECB head) Draghi to continue to strike a dovish tone at Thursday’s ECB meeting", said BNP Paribas (PA:BNPP) analysts, adding that any decline in the common currency would be "moderate".
The dollar, at 1.24 against a euro, is at a three-year low after U.S. Treasury secretary Steven Mnuchin said he welcomed a weaker currency.
A strong euro typically hurts European exporters whose products become less competitive against rivals producing in a weaker currency.
"We would flag Airbus in particular as the stock that stands out", Citi analysts said, as the stock, which is up above 8 percent since the beginning of the year, is suffering its third session in a row in negative territory with a 0.6 percent decline.
Trading updates put a highlight on the currency impact with drinks company Diageo (L:DGE) (up 1.4 percent) saying its sales growth was crimped by the strengthening pound.
Conversely, the currency move was good news for British clothing retailer Next (L:NXT), as RBC upgraded the stock.
Speciality baker Aryzta AG (S:ARYN) posted the STOXX 600 worst performance with a 22 percent fall after it sharply cut its 2018 core profit forecast.
In the tech sector, Software AG (DE:SOWGn) fell 5.5 percent. It reported a decline in third-quarter core profits as its digital, database and consulting divisions all showed lacklustre growth.
STMicroelectronics (PA:STM) edged down 1 percent after the chipmaker said auto and industrial demand would offset a seasonal smartphone dip in the first quarter of this year.
In a smaller capitalisations, Swedish biometric group Fingerprint Cards (ST:FINGb) lost over 20 percent of its value after it warned on profits and said it would slash jobs.
Nordic bank Nordea (ST:NDA) gave a disappointing update with fourth quarter operating profit below market expectations and fell 2.5 percent.
Get The App
Clariant (S:CLN) sustained the second worst fall of the STOXX 600, down 6.4 percent as activist investor White Tale sold out of the speciality chemicals group after failing to win an independent strategic review and board seats.
British lender Close Brothers Group (L:CBRO) gave a different picture -- seeing a rise in first-half profit, driven by strength in banking and asset management and higher trading income from market maker Winterflood. The shares were up 4.1 percent.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.