EUROPE MARKETS: European Stocks Wobble; German Ifo Data Disappoints

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European stocks swung between small gains and losses Friday, after a fall in German business confidence prompted investors to assess the chances of action by the European Central Bank.

The Stoxx Europe 600 index slipped 0.1% to 340.84, hovering around that level after the widely watched Ifo Business Climate Index fell to 110.4, missing expectations for 110.9. The Ifo expectations and current-conditions surveys for Germany -- Europe's largest economy -- also fell short of projections.

The overall Ifo is still at elevated levels "but it has clearly been shaken by the recent events in Ukraine and the lackluster pace of recovery in [the euro zone] as a whole," said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note on Friday.

The euro (EURUSD) fell back to late-February levels, buying $1.3623 compared with $1.3644 just ahead of the confidence data. Schlossberg said the Ifo data will prompt an interest-rate cut and consideration of other easing measures by the ECB.

"The key question now is just how aggressive will ECB be," he said. "Most of the market participants expect a rate cut both in refi and deposit rates -- something that should spur even more spending from the penny-pinching Germans, as saving will become even less attractive."

Germany's DAX 30 index was up 0.3% at 9,744.78. Earlier, German government figures confirmed economic growth in the first quarter. On the DAX, shares of Lanxess AG rose 1.6% after Goldman Sachs lifted the chemicals firm to buy from neutral.

Elsewhere, France's CAC 40 index nudged higher by 0.1% to 4,481.02. The U.K.'s FTSE 100 index shed 0.2% to 6,808.41, with shares of Smiths Group PLC giving up 0.8% after the security-sensor maker issued a profit warning.

But shares of Barclays PLC (BCS) in London gained 0.6%, after the U.K.'s Financial Conduct Authority said the bank will be fined more than GBP26 million ($43.9 million) for failings around the London Gold Fix. The bank and an ex-trader, Daniel James Plunkett, avoided higher fines of more than GBP37 million and GBP136,600, respectively, by agreeing to settle at an early stage.

Meanwhile, Pandora AS shares fell 3.9% after the Danish jewelry retailer said it was selling 13 million shares to institutional investors.

The Stoxx 600 was on track for a weekly rise of 0.6%.

In other developments, Europeans in 28 countries have or will vote in European Parliament elections. So-called euroskeptics, or parties that want to break down the power of the EU, look set to take more seats than ever. Voting ends on Sunday.

More news from MarketWatch:

Europe's continental vote will have local effects

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