Sun, Mar 03, 2013 - Page 15 News List

European stocks show little movement

LA DOLCE VITA?Markets in Europe were cautious last week following Italy’s inconclusive election, with national benchmark indices falling in 11 Western European countries

Bloomberg

European stocks were little changed this week as Italy’s inconclusive elections sparked concern the eurozone debt crisis will worsen, offsetting US economic data that beat forecasts.

Thales SA jumped 12 percent after posting better-than-estimated earnings and boosting its dividend. Mediobanca SpA and Intesa Sanpaolo led a drop in Italian shares. Royal Imtech NV plunged 12 percent after writing down assets and saying it will use the proceeds of a share sale to cut debt.

The benchmark STOXX Europe 600 Index added 0.2 percent to 289.02 this week. The measure has gained 3.3 percent so far this year, also completing its ninth monthly increase.

“Italian election result in one word: fiasco,” said Oliver Wallin, who helps oversee US$4.4 billion as investment director at Octopus Investments Ltd in London. “The politicians still have the potential to create problems. Having gotten ahead of themselves in the last two months, equity markets are still looking a little frothy, but the backdrop remains favorable for equities and risk assets generally.”

National benchmark indices fell in 11 of the 18 Western European markets this week.

The UK’s FTSE 100 rose 0.7 percent, France’s CAC 40 slipped 0.2 percent and Germany’s DAX climbed 0.6 percent.

Election results in Rome on Monday showed pre-election favorite Pier Luigi Bersani won the lower house by less than half a point.

Former Italian prime minister Silvio Berlusconi, who has vowed to reverse austerity measures, won a blocking majority in the Senate.

An Italian government needs a majority in both houses.

The result may lead Italian President Giorgio Napolitano to install an interim government to write a new election law as the prelude to another vote.

The European Central Bank (ECD) will not tighten monetary policy any time soon, ECB President Mario Draghi said.

While the ECB’s balance sheet may shrink as confidence returns to financial markets and banks repay emergency loans, policymakers are far from considering an exit from stimulus, Draghi said.

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