Tags: Europe | stocks | ECB | Draghi

European Stocks Decline Amid Investor Skepticism of ECB Measures

Friday, 05 September 2014 12:14 PM

Stocks in Europe dropped from a two-month high amid investor concern that the latest European Central Bank stimulus measures aren’t enough to spur the economic recovery.

The Stoxx Europe 600 Index fell 0.4 percent to 347.51 at 4:30 p.m. in London, paring losses of as much as 0.7 percent after a U.S. jobs report, and trimming the gauge’s fourth weekly advance to 1.6 percent. The index jumped 1.1 percent yesterday after the ECB unexpectedly cut its three main interest rates and announced a program to buy securities.

“Markets are weak today as investors doubt the measures announced yesterday will produce growth, improve jobs or increase inflation,” Daniel Weston, a portfolio manager at Aimed Capital GmbH in Munich, wrote in an e-mail.

U.S. employers hired in August the fewest workers this year, fueling speculation that the Federal Reserve won’t have to raise rates sooner than anticipated. Payrolls rose 142,000, less than the lowest estimate in a Bloomberg News survey of economists, figures from the Labor Department showed. The unemployment rate fell to 6.1 percent from 6.2 percent in July as people left the workforce.

In Europe, ECB President Mario Draghi is struggling to boost inflation that’s running at a fraction of the ECB’s goal against a backdrop of near-record unemployment.

GDP Data

The euro-area’s economic recovery ground to a halt in the second quarter as investment slid for the first time since the start of 2013, according to data published today. Gross domestic product in the three months through June was unchanged from the first quarter, when it increased 0.2 percent, the European Union’s statistics office in Luxembourg said. That confirmed Eurostat’s Aug. 14 estimate.

National benchmark indexes slid in 13 of the 18 western European markets today. France’s CAC 40 Index lost 0.2 percent and the U.K.’s FTSE 100 Index dropped 0.3 percent, while Germany’s DAX Index added 0.2 percent.

The volume of Stoxx 600 shares changing hands today was 9.5 percent higher than the 30-day average, data compiled by Bloomberg show.

A gauge of commodity producers retreated the most of 19 industry groups on the Stoxx 600. Fresnillo Plc dropped 4.6 percent to 868 pence, and Randgold Resources Ltd. declined 4.1 percent to 4,737 pence.

London Stock Exchange Group Plc slipped 2.2 percent to 2,040 pence after Borse Dubai Ltd. sold a 3.1 percent stake in the U.K. bourse.

Stock Downgrade

Coca-Cola HBC AG dropped 3.6 percent to 1,416 pence after Goldman Sachs Group Inc. cut the bottler to neutral from buy, citing its gains since July. Coca-Cola HBC’s shares rose 12 percent through yesterday since being added to Goldman’s buy list on July 10. The brokerage also cited risks to the company’s markets in Ukraine and Russia for the downgrade.

Neopost SA rallied 6.7 percent to 55.29 euros. The manufacturer of mailing and shipping equipment late yesterday announced a $90 million bond placement that Kepler Cheuvreux SA said was offered under very attractive terms. Neopost also reiterated its full-year forecast for revenue growth.

Randstad Holding NV added 2.4 percent to 38.61 euros after Credit Suisse Group AG upgraded the shares to outperform, the equivalent of a buy recommendation, from neutral. Credit Suisse increased its 2015 earnings per share estimate by 2 percent, citing restructuring at the biggest Dutch staffing company.

Daimler AG advanced 1.6 percent to 65.17 euros. The world’s third-largest maker of luxury cars reported a 9.2 percent increase in sales of its Mercedes-Benz cars in August.

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Stocks in Europe dropped from a two-month high amid investor concern that the latest European Central Bank stimulus measures aren't enough to spur the economic recovery.
Europe, stocks, ECB, Draghi
Friday, 05 September 2014 12:14 PM
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