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European Markets Finish Lower After Early Gains Erode

BRUSSELS/FRANKFURT/PARIS (Alliance News) - European markets got off to a positive start ...

Alliance News 13 March, 2018 | 5:02PM
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BRUSSELS/FRANKFURT/PARIS (Alliance News) - European markets got off to a positive start Tuesday, fueled by some positive corporate earnings updates.

However, the markets began to pare their gains around midday and slipped into the red in the afternoon. The markets began to lose steam around the release of the UK's spring statement and the release of the US inflation report.

The Chancellor of the Exchequer Philip Hammond revised up the growth forecasts for this year, while projecting a narrow deficit in order to reduce public debt levels.

In his spring statement, Hammond upgraded growth forecast to 1.5% in 2018, up from the 1.4% previously expected.

The Office for Budget Responsibility said the government borrowing is expected to be GBP 45.2 billion in the 2017-18 fiscal year, GBP 4.7 billion lower than the projections it made in November.

Hammond said that there was "light at the end of the tunnel" for the UK economy. "Another step on the road to rebuilding the public finances decimated by the party opposite."

The pan-European Stoxx Europe 600 index weakened by 0.98%. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.94%, while the Stoxx Europe 50 index, which includes some major UK companies, lost 1.01%.

The DAX of Germany dropped 1.59% and the CAC 40 of France fell 0.64%. The FTSE 100 of the UK declined 1.05% and the SMI of Switzerland finished lower by 1%.

In Frankfurt, E.ON advanced 4.22%. The utility announced a special dividend to shareholders after posting turnaround results for 2017.

Specialty chemical producer Wacker Chemie plunged 6.54% after saying it aims to lift its 2018 sales by a low single-digit percentage.

Re-insurer Hannover tumbled 4.35% after its Group net income for fiscal year 2017 declined to 958.6 million euros from last year's 1.171 billion euros.

In Paris, Airbus slid 0.22%. The aircraft major reported share buyback transactions from 5 March 2018 to 9 March 2018.

Telecom firm Iliad sank 9.96% after its net profit stayed essentially flat in 2017.

Veolia Environnement declined 2.76% after Qatari Diar, the sovereign wealth developer, sold its stake in the utility group.

In London, Antofagasta rallied 3.02%. The mining giant nearly doubled its 2017 dividend after reporting a sharp rise in earnings.

Direct Line Insurance fell 2.52% after Deutsche Bank downgraded its rating on the stock to Hold from Buy.

France's payroll employment increased in the fourth quarter, the statistical office Insee reported Tuesday. Net payroll job creation reached 72,700. Job creation grew 0.3% after rising 0.2% in the previous quarter.

Italy's unemployment rate declined in the fourth quarter, the statistical office Istat showed Tuesday. The unemployment rate came in at 11%, down from 11.2% a quarter ago. In the same period of 2016, the jobless rate was 12%.

Spain's consumer price inflation accelerated, as initially estimated, in February, final data from the statistical office INE showed Tuesday.

Consumer prices climbed 1.1% year-on-year in February, faster than the 0.6% rise seen a month ago. The rate came in line with the estimate published on February 27.

A report released by the Labor Department on Tuesday showed consumer prices in the US increased in line with economist estimates in the month of February. The Labor Department said its consumer price index rose by 0.2% in February after climbing by 0.5% in January. Economists had expected consumer prices to rise by 0.2%.

Copyright RTT News/dpa-AFX

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