EUROPE MARKETS: European Shares Fall, On Track For Weak August
30 August 2018 - 5:39PM
Dow Jones News
By Ryan Vlastelica
Italy's FTSE MIB tumbles 1.3%, led lower by its banks
European shares closed lower on Thursday, with bank and
commodity stocks among the biggest decliners of the day as
skepticism grew about an olive branch recently offered by the
European Union's top Brexit negotiator.
Italian stocks also were among the day's biggest decliners amid
continued concerns over the budget that the new government is to
propose next month.
Where are the major benchmarks trading?
The Stoxx Europe 600 Index fell 0.3% to 385.36. Despite the dip,
the pan-European index remains up 0.5% in what would be its second
straight weekly gain.
For the month of August, it is down 1.6% and on track for its
weakest monthly performance since March.
The euro fell against the dollar, trading at $1.1650, compared
with $1.1709 late Wednesday.
Germany's DAX dropped 0.5% to 12,494.24. For the week, it is up
0.8% in its second straight weekly climb. For the month, however,
it is down 2.4%.
France's CAC 40 Index fell 0.4% to 5,478.06. For the week, it is
up 0.8%, although it is looking at a 0.6% decline for August.
The FTSE 100fell 0.6% to 7,516.03
(http://www.marketwatch.com/story/uks-ftse-100-falls-as-buzz-persists-about-eu-officials-upbeat-brexit-remark-2018-08-30),
building on a similar drop in the previous session
(http://www.marketwatch.com/story/uk-stocks-falter-fundamental-value-seen-in-utilities-2018-08-29).
On Thursday, the pound traded at $1.2997, compared with $1.3028
late Wednesday.
For the week, the FTSE is down 0.8%, a decline that has taken it
near its lowest levels since May. For August, it is down 3%, on
track for its biggest decline since February.
What's driving trading?
Investors continued to focus on recent comments made by EU
negotiator Michel Barnier, who reportedly said the bloc was willing
to offer the U.K. an unprecedented partnership
(http://www.marketwatch.com/story/british-pound-jumps-uk-stocks-fall-after-eus-barnier-offers-upbeat-brexit-comments-2018-08-29),
"such as has never been with any other third country."
The news was taken as a sign that the U.K. may be able to avoid
a "no-deal Brexit," although the specifics remain to be seen and
the negotiating process has been fraught with delays. Barnier also
emphasized that the EU wouldn't accept any deal that harms the
single market.
A meeting slated for Friday between Barnier and U.K. Brexit
Secretary Dominic Raab will be closely watched by investors.
Separately, there continues to be a great deal of concern
surrounding Italy as the country prepares a budget that could run
afoul of the EU's deficit rules. The country's FTSE MIB stock index
dropped 1.3%, with its banks leading the slump. Unione di Banche
Italiane SpA(UBI.MI) tumbled 2.6% and UniCredit SpA (UCG.MI) was
off 1%.
Read more: Investors watch for Italy debt-rating downgrade, amid
fears of forced selloff
(http://www.marketwatch.com/story/investors-watch-for-italy-debt-rating-downgrade-amid-fears-of-forced-selloff-2018-08-24)
In the latest economic data, German jobless claims fell in
August
(http://www.marketwatch.com/story/german-jobless-claims-fall-in-august-2018-08-30)
while its unemployment rate came in at 5.2%, as had been expected.
U.K. car manufacturing fell 11% in July
(http://www.marketwatch.com/story/uk-car-production-falls-11-in-july-2018-08-30-14855637).
What stocks are in focus?
GAM Holding AG (GAM.EB) skidded 11% and was the biggest decliner
among European stocks. The investment manager will soon begin
disbursing proceeds from its Absolute Return bond fund; Credit
Suisse analysts on Thursday slashed their estimates for earnings
per share by 28% for 2019 and 56% for 2019.
Banking and commodity stocks were among the biggest drags of the
day. Rio Tinto PLC (RIO.LN) fell 1.1% while BHP Billiton PLC
(BLT.LN) was off 1.7%. Deutsche Bank AG (DBK.XE) fell 1.7% while
Commerzbank (CBK.XE) was off 1.6%.
Bouygues SA (EN.FR) jumped 4.4% after reporting results that
included an 18% rise in earnings
(http://www.marketwatch.com/story/bouygues-profit-up-on-telecoms-construction-units-2018-08-30).
Air France-KLM (AF.FR) shares fell 7.1% amid a labor
dispute.
Recruitment company Hays PLC (HAS.LN) said it would pay a
special dividend following its full-year results
(http://www.marketwatch.com/story/hays-to-pay-special-dividend-2018-08-30).
Shares dropped 4.3%.
HSBC upgraded a trio of Greek banks, saying they had made
process in tackling problems and that they offered attractive
valuations. Nevertheless, Piraeus Bank (TPEIR.AT) fell 2.1% and
Eurobank Ergasias SA (EUROB.AT) lost 2.6%.
(END) Dow Jones Newswires
August 30, 2018 12:24 ET (16:24 GMT)
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