European equities end little changed after six-week rise


Sun, Nov 24, 2013 - Page 15

European stocks were little changed, after six consecutive weeks of gains, as investors pondered prospects for economic growth and monetary policy.

Petrofac Ltd tumbled 17 percent after forecasting “flat to modest” profit growth next year. Sugar producer Suedzucker AG fell 15 percent after saying earnings will not match expectations. Aberdeen Asset Management PLC jumped 11 percent after Lloyds Banking Group agreed to sell its Scottish Widows Investment Partnership division to the money manager.

The STOXX Europe 600 Index lost less than 0.1 percent to 322.77 this week. The 600-share regional benchmark has surged 15 percent this year, reaching its highest level since May 2008, as central banks around the world pledged to continue their support for economic growth even as the US Federal Reserve gets ready to consider tapering its monetary stimulus.

The Euro STOXX 50 Index, a measure for euro-area shares, gained less than 0.1 percent this week.

“Tapering is an inevitable development that could be taken negatively in terms of market sentiment, but, however, it is fundamentally sound,” Ilario Di Bon, head of equities at Alliance Trust in London, said by phone. “It means that the recipe of the Fed starts to have an effect on the real economy. We are mending the system, as opposed to living in artificial support forever.”

Fed officials might reduce their US$85 billion in monthly bond purchases “in coming months” as the economy improves, according to the record of the Federal Open Market Committee’s Oct. 29 and 30 gathering, released on Wednesday.

Economists in a Bloomberg survey expect the central bank to begin reducing bond purchases in March.

The European Central Bank is considering a smaller-than-normal cut in the deposit rate if officials decide to take it negative for the first time, according to two people with knowledge of the debate.

The central bank this month refrained from cutting the deposit rate, even as it reduced its key refinancing rate to a record low 0.25 percent.

National benchmark indices rose in nine of the 18 Western European markets this week. Germany’s DAX gained 0.6 percent. The UK’s FTSE 100 and France’s CAC 40 both slipped 0.3 percent.