Sun, Jan 05, 2014 - Page 15 News List

European markets static in first week of trading this year

Bloomberg

European stocks were little changed in the first week of the year after a two-year rally that sent the STOXX Europe 600 Index to its highest level since May 2008.

Fiat SpA jumped 16 percent as the Italian carmaker took control of Chrysler Group LLC in a US$4.35 billion agreement, while Next PLC fained 11 percent after the UK’s second-largest clothing retailer raised its profit forecast.

On the losing side were Munich Re and Swiss Re Ltd, which each fell more than 3 percent as reinsurance prices dropped.

National benchmark indices rose in 10 of the 18 western European markets this week, with the UK’s FTSE 100 slipping 0.3 percent, Germany’s DAX dropping 1.6 percent and France’s CAC 40 retreating 0.7 percent.

The Euro STOXX 50 Index of the biggest shares in the eurozone declined 1.2 percent this week to snap two straight weeks of gains.

The STOXX 600 slipped less than 0.1 percent to 327.64 in the four-day week. The gauge posted its second consecutive annual rise last year, climbing 17 percent and closing at the highest level since May 2008 on Tuesday.

The European Central Bank vowed to keep interest rates low for a prolonged period and investors’ confidence in the US recovery grew after the US Federal Reserve decided to slow its bond-buying.

Global equities rose by US$9.6 trillion last year as central bank stimulus helped the US economy gain momentum and the eurozone emerged from recession.

The STOXX 600 posted its biggest annual gain since 2009, ending the year at a valuation of 15.4 times its constituents’ projected earnings, up from 11.6 times at the beginning of last year.

Profits in the STOXX 600 are expected to climb 15 percent this year, according to estimates compiled by Bloomberg. They have fallen more than 1 percent on average over the past three years.

Final readings confirmed on Thursday that eurozone manufacturing expanded at its fastest pace since May 2011 last month, while output in Germany — the bloc’s largest economy — grew for a sixth consecutive month.

In Spain, registered unemployment fell by 107,570 people last month — the most since June — the Spanish Ministry of Employment and Social Security said on Friday.

This story has been viewed 1176 times.
TOP top