Sun, Sep 13, 2015 - Page 15 News List

Europe stocks trim weekly gain on US data, rate outlook

Bloomberg and AFP, LONDON

Concern persisted on Friday over an impending US Federal Reserve rate decision, sending European stocks lower for a second day.

Declines in telecommunications shares contributed to losses after opposition from the EU led Telenor ASA and TeliaSonera AB to scrap a merger of their Danish businesses. Rival TDS A/S slid 7.7 percent as the news ended its prospects of facing less competition. Telecom Italia SpA, a target of takeover speculation, slipped 3.1 percent.

The STOXX Europe 600 Index dropped 1 percent at the close of trading, paring its weekly advance to 0.7 percent. After rising for three straight days, European shares slid on Thursday as strong US labor data stoked concern about a rate increase.

A report on Friday showed US consumer sentiment fell to a one-year low.

“A lot of people are sitting on the sidelines and taking some money off the table ahead of next week’s FOMC meeting,” said Markus Huber, a London-based senior sales trader at Peregrine & Black Ltd, referring to the US Federal Open Market Committee.

“Even though the chances of a rate hike are slim, people just want to be sure, just in case there are some comments from [US Fed Chair Janet] Yellen. We’re still in a consolidation phase where it hasn’t been decided whether the next major move is going to be up or down,” Huber said.

A hike in borrowing costs would likely hinder investment possibilities and also fan a flight of capital back to the US in search of better returns, to the detriment of emerging markets.

Traders’ bets for a September increase have held steady at 28 percent this week. Yellen is to hold a press conference after the decision.

London’s FTSE 100 index of leading shares slipped 0.62 percent to close at 6,117.76 points.

In the eurozone, the CAC 40 in Paris dropped 1.04 percent to finish at 4,548.72 points and in Frankfurt the DAX 30 lost 0.85 percent to 10,123.56.

Among other shares active on corporate news, Actelion Ltd slid 5.4 percent after confirming it is in preliminary talks with ZS Pharma Inc.

Finmeccanica SpA rallied 5.4 percent after a person familiar with the matter said partner Eurofighter GmbH is close to sealing a multibillion euro order to supply warplanes to Kuwait. Regus PLC climbed 2.6 percent after a report that its founder recently rejected an approach from a private equity firm.

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