The majority of the European markets ended Wednesday’s trading session in positive territory. Several better than expected earnings reports from U.S. banks provided a boost to investor sentiment. Economic data from the U.S. was mixed and investors are awaiting a slew of Chinese economic reports. Automakers were weak after the decline in new auto sales and banks also turned in a negative performance.
The euro’s exchange rate is “alarmingly high” and is likely to affect the Eurozone economy which is showing signs of stability, Eurogroup President Jean-Claude Juncker said Tuesday.
While speaking at the annual gathering of business leaders in Luxemberg, Junker warned that an overvalued euro is likely to threaten the economy that is reemerging from financial crisis.
Junker’s comments came just few days after European Central Bank President Mario Draghi’s statement that the euro area may see a gradual recovery later in the year as there are some modest signs of stabilization.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.05 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.01 percent.
The DAX of Germany climbed by 0.20 percent and the CAC 40 of France advanced by 0.30 percent. The SMI of Switzerland gained 0.45 percent, but the FTSE 100 of the U.K. fell by 0.22 percent.
In Frankfurt, Metro dipped by 0.17 percent. The department store operator reported a marginal rise in fourth-quarter sales despite challenging market conditions, especially in Southern Europe. The company also reaffirmed its full-year profit forecast.
Deutsche Wohnen increased by 0.15 percent, after it resolved on a capital increase against cash contributions and under exclusion of shareholders’ subscription rights.
Automakers were weak after data released by the European Automobile Manufacturers’ Association showed Europe’s new car sales declined sharply in December, continuing a downward trend started fifteen months ago. Sales plunged 16.3 percent from a year ago, while demand for new cars reached the lowest level recorded since 1995. Daimler declined by 0.16 percent and Porsche decreased by 0.68 percent. BMW finished up by 0.80 percent and Volkswagen gained 0.80 percent.
In Paris, Renault finished lower by 1.86 percent and Peugeot dropped by 3.35 percent.
Societe Generale decreased by 2.84 percent. Credit Agricole lost 2.19 percent and BNP Paribas fell by 0.05 percent.
In London, Tesco declined by 0.56 percent. Regulators in Ireland have found horse DNA in the company’s beef products.
Barclays fell by 0.68 percent and Royal Bank of Scotland lost 1.13 percent. Lloyds Banking group decreased by 2.50 percent and Standard Chartered finished lower by 1.19 percent.
Barry Callebaut dropped by 0.77 percent in Zurich. The manufacturer of cocoa and chocolate products reported a 0.6 percent decline in first-quarter sales revenue in reporting currency.
Eurozone inflation remained unchanged at 2.2 percent in December as initially estimated, final data released by Eurostat showed Wednesday. The latest figure is the lowest since November 2010. Inflation has been hovering above the central bank’s threshold limit of 2 percent for many months.
The number of people worked in local manufacturing units in Germany rose by about 79,000 or 1.5 percent in November from a year ago, Destatis reported Wednesday. Around 5.2 million people were employed in manufacturing.
Germany’s general government debt increased from last year in the third quarter, data released by the Federal Statistical Office showed Wednesday. Total federal debt, including those of governments, states, and municipalities/associations, increased 1.6 percent from last year to EUR 2064.1 billion at the end to the third quarter.
Consumer prices in the U.S. came in unchanged in the month of December, according to a report released by the Labor Department on Wednesday, with a sharp drop in gasoline prices offsetting higher prices for food and shelter.
The Labor Department said its consumer price index was unchanged in December after falling by 0.3 percent in November. The unchanged reading matched economist estimates.
Industrial production in the U.S. increased by slightly more than expected in the month of December, the Federal Reserve revealed in a report on Wednesday, with increased manufacturing and mining output more than offsetting a sharp drop in utilities output.
The report showed that industrial production increased by 0.3 percent in December following a revised 1.0 percent jump in November. Economists had expected production to edge up by 0.2 percent compared to the 1.1 percent growth originally reported for the previous month.
Following eight consecutive monthly gains, homebuilder confidence in the U.S. held steady in January, according to a report released by the National Association of Home Builders on Wednesday. The report showed that the NAHB/Wells Fargo Housing Market Index came in at 47 in January, unchanged from December. Economist had expected the index to inch up to 48.
by RTT Staff Writer
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