European Stocks Pause as Investors Still Mull Draghi's Hint at Stimulus -- Update

By Tommy Stubbington 

European stocks paused Tuesday after a strong rally in the previous session, with investors continuing to digest European Central Bank President Mario Draghi's speech late last week that suggested further stimulus could be on the way for the region.

Mr. Draghi's speech on Friday, in which he called for action to spur growth, had also sent the euro to an 11-month low against the dollar, and propelled a swath of euro-zone government bonds to new highs.

The common currency rebounded slightly on Tuesday, adding 0.1% to trade at $1.3192.

In equity markets, the Stoxx Europe 600 index was little changed in early trade, having climbed 1.1% on Monday.

"While a dovish shift in tone by the central bank chief probably justifies some market optimism, it is important not to get too far ahead on this ECB [quantitative easing] idea as it remains highly unlikely that it will be introduced soon and any such plan is largely data-dependent going forward," said analysts at Crédit Agricole.

Most major indexes were flat or a touch lower, but the U.K.'s FTSE 100 bucked the trend, rising 0.3% as it played catch-up with other markets after a public holiday.

Germany's DAX lost 0.3%, while France's CAC 40 was unchanged. The declines came despite another fresh record on Wall Street, where the S&P 500 closed just short of the 2000 mark.

Futures contracts pointed to a steady start for the S&P on Tuesday. Changes in futures aren't necessarily reflected in market moves after the opening bell.

ArcelorMittal SA was one of the top risers on the pan-European index after UBS raised its rating on the steelmaker to buy from sell.

U.K. advertising firm WPP PLC also climbed after its profit for the first half of the year topped market expectations.

At the other end of the index, copper producer Antofagasta PLC slipped after its earnings missed consensus.

In bond markets, the German 10-year yield was steady at 0.94%, close to Monday's all-time low. Yields in Spain, Italy, and Portugal all chalked up fresh lows. Yields fall as prices rise.

In commodities, gold climbed 0.8% to $1,289.50 an ounce, while Brent crude oil was up 0.1% at $102.71 a barrel.

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