European shares ease from eight-month high as miners weigh

Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt September 4, 2017. — Reuters pic
Traders work in front of the German index, DAX board, at the stock exchange in Frankfurt September 4, 2017. — Reuters pic

LONDON, April 17 — eased from eight-month highs today, weighed down by healthcare and mining stocks while investors looked past better-than-expected first-quarter economic growth in .

The pan-European STOXX 600 index was down 0.2 per cent by 0930 GMT after five straight days of gains. All country indexes were flat to higher except London FTSE 100 .

China’s economy unexpectedly steadied in the first quarter, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement.

Analysts said it was too early to call a sustainable turnaround there, and further policy support would be needed to maintain momentum.



“The reaction in was muted after the data release, probably because much of the positivity has already been priced in,” said Hussein Sayed, chief market strategist at FXTM.

The positive China data spurred demand for auto stocks, the most among European sectors, as concerns over eased. The data also pushed Germany’s 10-year government yield to a four-week high.

Banks rallied 0.6 per cent and drove a 0.3 per cent gain in Italy’s bank-heavy.

However, losses in basic resources and healthcare stocks outweighed.

BHP Group PLC fell three per cent, bringing down London’s FTSE and the STOXX 600 as the world’s biggest miner cut its forecast for iron ore output, a day after rival Rio Tinto slashed its output guidance.

The healthcare sector also dropped 1.3 per cent as Novartis fell after Jefferies reduced on its shares.

Danone slipped one per cent after the French food group’s first-quarter sales slowed on weaker demand for infant formula products in China and a consumer boycott in Morocco.

Its peer SA dropped about a per cent ahead of its quarterly report tomorrow.



Bunzl was the worst performer on the pan-European index, down nearly nine per cent after the business supplies distributor said first-quarter growth slowed as the grocery and retail business in its biggest market — North — remained sluggish.

Also capping losses was the tech sector, helped by a climb in chip stocks and Mobile telecom equipment maker Ericsson .

ASML Holding rose more than two per cent after the semiconductor equipment maker reported better-than-expected first quarter earnings and repeated it expects growth to accelerate through the year.

European chip stocks — AMS, STMicro, Siltronic, Infineon Technologies — were up between 1.5 per cent and five per cent as US peer Qualcomm Inc surged yesterday on an iPhone modem chips deal with Inc.

Ericsson ticked about three per cent higher after beating first-quarter result forecasts and raising full-year outlook for the global networks market.

Commerzbank shares rose three per cent after a media report that Dutch bank ING added its name to a list of merger suitors. That followed approaches by Deutsche Bank and Italy’s UniCredit. — Reuters

Source: The Malay Mail Online







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