Sun, Apr 28, 2013 - Page 15 News List

European stocks fall on disappointing US economic data

Reuters, LONDON, and Bloomberg

European shares fell on Friday as some downbeat corporate results and disappointing US economic data cast a shadow, though a regional benchmark index posted its best weekly gain in five months.

The pan-European FTSEurofirst 300 index closed 0.4 percent lower on the day at 1,196.41 points, but was still up 3.8 percent for the week, its best performance in five months, on mounting expectations that the European Central Bank would cut interest rates on Thursday.

French fashion firm and luxury goods group PPR was among the top losers — dropping 6.8 percent in volume three times the average for the past 90 days, after its first-quarter sales missed forecasts.

Bucking the trend was German chemical group BASF, up 3.8 percent in three times its volume average after saying it expected sales and operating profit growth in all its business divisions this year.

Thomson Reuters StarMine data showed 51 percent of the STOXX Europe 600 companies that have announced results so far have missed analysts’ forecasts.

The FTSEurofirst 300 extended losses in the afternoon as data showed US economic growth was lower than expected in the first quarter, striking a cautious note ahead of the non-farm payrolls report on Friday.

“Next week is probably when I’ll make up my mind,” said Manish Singh, director and head of investment services at Crossbridge Capital, who has positions in European financial and pharmaceutical stocks.

“If we get a bad set of data then you have to cut your positions because it could play into the crowd thinking of ‘sell in May and go away,’” he said.

The STOXX Europe 600 index has fallen by an average 0.8 percent in May over the past 10 years, data from brokerage BTIG showed.

The benchmark index rose 3.7 percent to 295.89 this week, its biggest weekly advance since November. It is up 0.6 percent so far this month and a positive close would mark its ninth consecutive monthly gain, the longest winning streak since 1996 to 1997, strengthening the call for a May correction according to traders.

National benchmark indices advanced in all the 18 Western European markets this week. The UK’s FTSE 100 added 2.2 percent. France’s CAC 40 increased 4.3 percent and Germany’s DAX Index gained 4.8 percent.

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