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EUROPE MARKETS: European Stocks Head For 2nd Day Of Losses, With Retail Shares In The Red

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01/11/2018 | 05:23am EDT

By Carla Mozee, MarketWatch

ECB minutes due later in the day

European stocks edged lower Thursday, poised to fall for a second straight day, as investors pulled down retail stocks. Retailers were declining after the release of disappointing financial updates from the sector that included the key Christmas shopping period.

Traders are expected to watch for minutes from the European Central Bank's meeting in December are due for release later in the day.

What are markets doing: The Stoxx Europe 600 index was off 0.1% at 398.38. Consumer services and telecom shares were down the most, while basic materials topped advancing sectors. On Wednesday, the pan-European index fell 0.4% , pulling back from a 2 1/2 -year high hit on Tuesday.

Germany's DAX 30 index shed 0.1% at 13,273.25, after losing 0.8% the previous session. France's CAC 40 edged up 0.1% to 5,508.96.

Spain's IBEX 35 fell 0.2% to 10,410.70, while the U.K.'s FTSE 100 index rose 0.1% to 7,756.93, moving around an all-time closing high.

The euro traded at $1.1936, up from $1.1949 late Wednesday in New York. The pullback came as the dollar recovered from jitters about whether China will slow its purchases of U.S. government bonds.

The yield for the 10-year German government bund fell 3 basis points to 0.448%, according to Tradeweb. Yields fall when prices rise.

What's driving the market: A number of retail stocks were being punished after trading updates, including Danish jeweler Pandora A/S and Marks & Spencer PLC.

Later, investors will get minutes from the ECB monetary policy meeting on 13-14 December, when policy makers held its deposit rate at a record low of negative 0.4%, despite forecasts for solid economic growth. The bank also confirmed its plan to halve its quantitative easing program to EUR30 billion starting this month and to let it run until the end of September 2018 or "beyond."

"The [December] discussion is likely to center on the question of what should be the appropriate stance of monetary policy when growth is accelerating but inflation isn't, a conundrum that all the major central banks are grappling with nowadays," said Marshall Gittler, chief strategist at ACLS Global, in a note.

The minutes are scheduled for release at 1.30 p.m. London time, or 8.30 a.m. Eastern Time.

Stock movers: Pandora shares (>> PANDORA A/S) tumbled 13%, facing their worst session since August 2011, according to FactSet. The Danish jeweler said in its preliminary 2017 financial update Thursday that revenue was "marginally below" its initial financial guidance of 23 billion to 24 billion Danish kroner. It also said its Ebitda margin is expected to be 37.3%, versus its full-year guidance of 38%.

"[S]everal external factors have worked against us during 2017, including a difficult U.S. retail climate as well as an unfavorable currency development," said Pandora CEO Anders Colding Friis in a statement.

Marks & Spencer PLC (>> Marks and Spencer Group Plc) (>> Marks and Spencer Group Plc) dropped 4.9% after the British retailer and supermarket chain said like-for-like food sales declined in the 13 weeks to Christmas.

Tesco PLC (>> Tesco PLC) (>> Tesco PLC) fell 4.3%. Britain's largest supermarket chain said it's confident in its outlook for fiscal 2018, after like-for-like U.K. sales rose 1.9% during the Christmas period. But slower sales of general merchandise and tobacco dragged on overall performance.

Richemont SA shares (>> Compagnie Financière Richemont) climbed 1.4% after the Swiss owner of Cartier and other high-end jewelry brands said third-quarter revenue grew moderately , missing analyst forecasts.

Shares of Hexagon AB (HEXA-B.SK) jumped 5.5% to top the Stoxx 600. Reports late Wednesday said the chief executive of the Swedish industrial-technology company, Ola Rollén, had been acquitted on insider-trading charges related to an outside investment.

Economic data: Eurozone industrial production jumped 1% in November, compared with expectations for a rise of 0.7%, according to FactSet. Output was up 3.2% on the year, Eurostat said.

Germany's economy grew by 2.2% in 2017 , according to a preliminary estimate from the country's Destatis agency. Economists polled by The Wall Street Journal projected growth of 2.3%.

The Bank of France raised its fourth-quarter growth forecast to 0.6% quarter-on-quarter from a previous forecast of 0.5%.

Stocks mentioned in the article
ChangeLast1st jan.
CAC 40 0.09% 4889.52 Real-time Quote.-18.21%
DAX 0.66% 12674.88 Delayed Quote.-4.33%
HEXAGON AB 1.54% 595.2 Delayed Quote.13.37%
IBEX 35 -0.11% 6950.5 End-of-day quote.-27.21%
JUST GROUP PLC 2.06% 46.54 Delayed Quote.-41.09%
NEXT PLC 1.67% 5714 Delayed Quote.-18.58%
RISE, INC. 0.00% 29 End-of-day quote.-3.33%
STOXX EUROPE 600 0.29% 363.55 Delayed Quote.-12.57%
SWISS RE LTD -0.23% 70.2 Delayed Quote.-35.42%
THE EASTERN COMPANY 6.59% 19.4 Delayed Quote.-36.46%
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