Sun, Sep 07, 2014 - Page 15 News List

European shares dip on investor skepticism

Bloomberg

Stocks in Europe dropped from a two-month high amid investor concern that the latest European Central Bank (ECB) stimulus measures were not enough to spur an economic recovery.

The STOXX Europe 600 Index fell 0.4 percent to 347.57 at the close of trading on Friday, trimming its fourth weekly advance to 1.6 percent. The gauge pared losses of as much as 0.7 percent after a US jobs report. The index jumped 1.1 percent on Thursday after the ECB unexpectedly cut its three main interest rates and announced a program to buy securities.

“Markets are weak today [Friday] as investors doubt the measures announced yesterday [Thursday] will produce growth, improve jobs or increase inflation,” Daniel Weston, a portfolio manager at Aimed Capital GmbH in Munich, wrote in an e-mail.

US employers hired the fewest workers this year last month, fueling confidence that the US Federal Reserve would not raise rates sooner than expected. Payrolls increased by 142,000, fewer than the lowest estimate in a Bloomberg News survey of economists, figures from the US Labor Department showed. The unemployment rate fell to 6.1 percent from 6.2 percent in July as people left the workforce.

In Europe, ECB President Mario Draghi is struggling to boost inflation that is running at a fraction of the bank’s goal against a backdrop of near-record unemployment.

The euro-area’s economic recovery ground to a halt in the second quarter, as investment slid for the first time since the start of last year, according to data published on Friday. GDP in the three months through June was unchanged from the first quarter, when it increased 0.2 percent, the EU’s statistics office in Luxembourg said. That confirmed Eurostat’s Aug. 14 estimate.

National benchmark indices slid in 12 of the 18 western European markets on Friday. France’s CAC 40 Index lost 0.2 percent and the UK’s FTSE 100 Index dropped 0.3 percent, while Germany’s DAX Index added 0.2 percent.

The volume of STOXX 600 shares changing hands on Friday was 8.9 percent higher than the 30-day average, data compiled by Bloomberg show.

A gauge of commodity producers retreated the most of 19 industry groups on the STOXX 600. Fresnillo PLC dropped 4.6 percent to £8.68 and Randgold Resources Ltd declined 4.1 percent to £47.37.

London Stock Exchange Group PLC slipped 2.2 percent to £20.40 after Borse Dubai Ltd sold a 3.1 percent stake in the UK bourse.

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