European stocks were little changed this past week, following three weeks of gains, as concern US lawmakers will not agree on a budget before the holiday offset optimism that the euro area will get a single banking regulator.
PSA Peugeot Citroen SA soared 16 percent, the biggest rally on the STOXX Europe 600 Index this past week, as the carmaker said it will cut another 1,500 jobs. Alcatel Lucent SA jumped 6.4 percent after winning a financing deal. Deutsche Bank AG declined 5.5 percent after Germany’s biggest lender said fourth-quarter profit will fall short of analysts’ estimates.
The benchmark STOXX Europe 600 Index rose 0.1 percent to 279.4 this past week. The equity benchmark has rallied 19 percent from this year’s low on June 4 as the European Central Bank (ECB) and the US Federal Reserve introduced bond-buying programs.
A gauge of auto companies posted the biggest gain of the 19 industry groups in the STOXX 600 this week. Renault added 6.2 percent, as Daimler AG rose 4.8 percent and Mercedes-Benz 11-month car sales climbed 5.1 percent.
European stocks will struggle to extend their rally this year as the region’s benchmark measure trades close to a key resistance level. The STOXX 600 remains stuck near the 50 percent Fibonacci retracement level of the slump between July 2007 and March 2009 in the aftermath of the financial crisis.
EU finance ministers agreed to put the ECB in charge of all large eurozone lenders. About 200 banks will qualify for oversight by the central bank rather than national regulators, EU Financial Services Commissioner Michel Barnier said.
In Europe, the finance ministers of the 17 nations using the single currency approved a 49.1 billion euro (US$64.5 billion) payment of aid to Greece after the country completed a buyback of its own debt. In Germany, a survey of economic expectations among investors and analysts rebounded this month. The ZEW Center for European Economic Research’s index rose to 6.9 from minus-15.7 last month, beating economists’ estimates.
In the US, US President Barack Obama reduced his demand for new tax revenue in the federal budget for next year. Even so, US congressional Republicans failed to accept the proposed changes, prompting concern that politicians will not reach agreement on the new budget before the end of the year.