EUROPE MARKETS: European Stocks Face 6th Day Of Losses As Euro Marches Higher

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11/14/2017 | 12:04 pm


By Carla Mozee, MarketWatch



Shared currency rises on back of stronger-than-expected German GDP reading



Major European stock indexes slipped Tuesday, with the regional benchmark headed for a sixth straight loss, as the euro hit its highest level in three weeks on the back of stronger-than-expected German economic growth figures.



What markets are doing: In Frankfurt, the DAX 30 index fell fractionally to 13,068.61, and France's CAC 40 gave up 0.1% to 5,338.72.



But the U.K.'s FTSE 100 was higher by 0.1% at 7,424.84, and Spain's IBEX held up 0.1% at 10,054.00.



Looking at the pan-European benchmark, the Stoxx Europe 600 was off 0.2% at 385.34. The move came as Swiss shares as measured by the SMI edged down 0.1% to 9,153.03. Monday's decline marked the longest run of losses since late May.



The euro traded at $1.1716, rising from $1.1669 late Monday in New York. Against the pound, the shared currency fetched GBP0.8948, up from GBP0.8843 on Friday.



What's driving markets: The euro climbed above $1.1700 against the dollar for the first time since Oct. 26, according to FactSet data. That puts the euro up by roughly 0.6% on a week-to-data basis.



Strength in the euro puts pressure on shares of European exporters, as it makes their products more expensive for holders of other currencies. On the German index, shares of Adidas AG (>> Adidas) shed 0.2% and Volkswagen AG (>> Volkswagen AG) (>> Volkswagen AG) lost 0.3%.



Investors bumped up the euro after Destatis said Germany's gross domestic product rose by 3.3% in the third quarter , outstripping expectations for 2.4% growth. Germany is Europe's largest economy.



What strategists are saying: "Stock markets have seen tentative buying this morning, as they look to recover from a tough few days. However, with the central banking cabal of Yellen, Kuroda, Draghi and Carney to speak today, it is not surprising to see the main indices mostly tread water so far," said Chris Beauchamp, chief market analyst at IG, in a note.



"Germany's economic success story goes on and on and on," said ING chief economist Carsten Brzeski, noting it "remains the high-flyer of the eurozone."



"Looking ahead, there is very little reason to fear a sudden end to the current performance. In fact, today's drivers of the economy should also be tomorrow's drivers of the economy. Low interest rates should further support activity in the construction sector, boost private consumption and contribute to the ongoing investment upswing," Brzeski said in a note.



Central bankers were also in focus, as European Central Bank President Mario Draghi, Bank of England Gov. Mark Carney, Federal Reserve Chairwoman Janet Yellen and Bank of Japan Gov. Haruhiko Kuroda appeared on a panel Tuesday morning in Brussels.



The leaders of the four global heavyweights of central banks were sharing their views on communicating with investors and the markets at a moderated discussion at the European Central Bank's headquarters.



Stock movers: Infineon Technologies AG (>> Infineon Technologies) shares jumped 5.4% on the DAX 30. The chip maker's net profit for the fourth quarter fell 22% as the company faced a strong headwind from dollar depreciation.



Henkel AG & Co. (>> Henkel AG & Co KGaA) shares dropped 3.4% after the company said third-quarter net profit fell to 564 million euros ($657.4 million) from EUR576 million a year ago. The maker of Dial soap and Purex laundry detergent raised its forecast for adjusted earnings.



Tesco shares (>> Tesco) climbed 5.1% after the U.K. Competition and Markets Authority provisionally cleared a merger between the supermarket chain and wholesaler Booker Group (>> Booker Group) . Booker's shares , which trade off the FTSE 100, climbed 5.2%.



Vodafone (>> Vodafone Group plc) (>> Vodafone Group plc) jumped 5.2% after the mobile telecommuncations company raised its outlook for fiscal 2018 , with pretax profit for the first half rising 55% year-over-year.



Economic data: U.K. inflation came in at 3% in October , slightly below expectations for a 3.1% print.





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