EUROPE MARKETS: European Stocks End Lower, Dragged Down By Huge Drops For Steinhoff, Saga
By Carla Mozee and Victor Reklaitis, MarketWatch
Hammerson's stock is another big loser after deal news
European stocks finished with modest losses Wednesday, as the region's main benchmark retreated for a second day in a row.
Steinhoff International Holdings NV and Saga PLC dived after troubling updates, and tech shares also fronted the losses.
What markets are doing: The Stoxx Europe 600 fell 0.1% to end at 386.32, adding to Tuesday's fall of 0.2% . But the benchmark is up 0.6% for the week and is showing a 6.9% gain for this year.
Germany's DAX 30 index fell 0.4% to close at 12,998.85, while France's CAC 40 gave up less than 0.1% to 5,374.35. The U.K.'s FTSE 100 bucked the negative trend, rising 0.3% to finish at 7,348.03, as a drop in the British pound helped.
The euro traded at $1.1789, down from $1.1826 late Tuesday in New York.
Stock movers: Steinhoff International Holdings NV plunged 63% after the retail holding company said Chief Executive Markus Jooste resigned with immediate effect amid an accounting probe. The company said "new information has come to light today which relates to accounting irregularities requiring further investigation."
Saga PLC (>> Saga) sank 21% after the travel and insurance company warned that it expects its underlying profit growth for its current financial year to be behind the previous year. It cited more challenging insurance brokering conditions and disruption to its tour operations as reasons for the outlook.
Steinhoff and Saga were the Stoxx Europe 600's two biggest losers.
Retail property developer Hammerson PLC (>> Hammerson) was another notable decliner, falling 6.2%. It said it's buying shopping center owner Intu Properties PLC (>> Intu Properties) for GBP3.4 billion ($4.6 billion). Intu shares rose 14% for the Stoxx 600's largest gain.
Anheuser-Busch InBev SA (>> Anheuser-Busch InBev) was off 1.4% after a ratings downgrade to underweight from neutral at J.P. Morgan Cazenove.
But J.P. Morgan Cazenove upgraded its rating on budget airline EasyJet PLC (>> EasyJet) to overweight from underweight. Shares rose 1.3%. Separately, EasyJet is set to roll out German domestic routes from Berlin next month, according to media reports.
What else is moving markets: Techs were under pressure, with the Stoxx Europe 600 Technology Index dragged down 0.6%. A selloff in tech stocks also left Asian markets lower Wednesday.
There are worries that the retention of the U.S. corporate alternative minimum tax, or AMT, in the Senate version of the Republicans' tax bill would hit tech companies harder than others. The House's version of its tax bill repealed the corporate AMT, but in a last-minute switch before passing its bill early Saturday morning, the Senate decided to keep the provision.
What strategists are saying: "Having seen some decent gains so far this year, there appears to be increasing evidence that markets are starting to look a little tired," said CMC Markets UK Chief Market Analyst Michael Hewson in a note.
"This declining momentum has been something that has been particularly notable in European markets since the peaks back in early November, and while we have managed to find some level of support for most of the past week or so, the subsequent rebounds have been getting shallower," he said.
European stocks were on course for losses Wednesday "as U.S. politicians look to pick apart the two different incarnations of the U.S. tax bill and try and pass it into a format that both houses can agree on," Hewson added.