EUROPE MARKETS: European Stocks On Course For 2nd Losing Session, With Tech Knocked Down
By Carla Mozee, MarketWatch
Anheuser-Busch shares downgraded
European stocks dropped Wednesday, with tech and mining shares fronting broad-based losses across the region, setting blue chips on course for a second consecutive decline.
What markets are doing: The Stoxx Europe 600 fell 0.6% to 384.41. No sector moved higher, and losses were led by the tech and basic material groups. On Tuesday, the regional benchmark shed 0.2% .
Germany's DAX 30 index fell 1% to 12,924.19, and France's CAC 40 gave up 0.5% to 5,349.69. Spain's IBEX 35 gave up 0.6% to 10,149.40 and the U.K.'s FTSE 100 slipped 0.2% to 7,315.88.
The euro traded at $1.1816, down from $1.1826 late Tuesday in New York.
What's moving markets: Techs were under pressure, with the Stoxx Europe 600 Technology Index dragged down 1%. That followed declines on Wall Street, where the tech-heavy Nasdaq Composite lost ground and a selloff in tech stocks left Asian markets lower.
There are worries that the retention of the U.S.'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 The House's version of its tax bill repealed the corporate AMT, but in a last-minute switch before passing its bill early Saturday morning, the Senate decided to keep the provision.
Meanwhile, mining stocks were hurt in the wake of recent losses for copper prices on worries over rising inventories and the potential for slowing demand from China, which makes up about half of global consumption for the industrial metal. The Stoxx Europe 600 Basic Resources Index lost 1.1%.
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.
Stock movers: Steinhoff International Holdings NV plunged 57% 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 24%, looking at their worst session on record, 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 broking conditions and disruption to its tour operations as reasons for the outlook.
Intu Properties (>> Intu Properties) rallied 20% as retail property developer Hammerson PLC (>> Hammerson) said it's buying the shopping center owner for GBP3.4 billion ($4.6 billion). Hammerson shares fell 1.8%.
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 0.9%. Separately, EasyJet is set to roll out German domestic routes from Berlin next month, according to media reports.