EU shares flat, take a breather after global rally

Kalerkantho Online   

22 November, 2017 16:58 PM

EU shares flat, take a breather after global rally

The shadows of journalists are seen as Marine Le Pen, head of France's far-right National Front (FN) speaks to the media following a meeting with French President Emmanuel Macron at the Elysee Palace in Paris, France, November 21, 2017. REUTERS/Philippe Wojazer

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European shares traded only slightly higher on Wednesday, losing some of the momentum that pushed stocks in Asia and on Wall Street to new highs overnight on continued faith in synchronized global economic growth.

The STOXX 600 benchmark was up 0.1 by 1023 GMT with European bourses trading sideways as a 0.1 percent rise in the euro EUR= put pressure on exporters, notably on the constituents of Germany's DAX .GDAXI, which shed 0.2 percent, reports Reuters.

“I see very few people repositioning themselves on the markets before a period of low liquidity like Thanksgiving,” said Pierre Martin, a senior trader at Saxo Bank.

He argued that many investors had taken advantage of last week’s dip to take new positions on stocks but that in the absence of major economic or corporate news, there was currently little incentive for them to aggressively seek new opportunities.

Norwegian media group Schibsted (SBSTA.OL) posted the sharpest decline of the index after an offering of B-shares to finance mergers and acquisitions in online classifieds. Its shares retreated 7.1 percent

Utilities .SX6P posted the best sectoral performance in Europe, with Germany’s RWE (RWEG.DE) and Spain’s Endesa (ELE.MC) leading the pack with rises of 3 percent and 2 percent respectively.

UBS upgraded RWE to “buy”, saying coal and carbon risks may have been overestimated, while Moody’s raised its forecasts for French power pricing, reflecting a rebound in commodity prices.

Akzo Nobel (AKZO.AS) rose 1.1 percent after it called off a merger of equals with U.S. coatings company Axalta (AXTA.N).

The FTSE .FTSE was up 0.3 percent, about two hours before British finance minister Philip Hammond was due to present his budget, under pressure to help unhappy voters as the country faces faltering economic growth.

While some traders said they were not holding their breath for any major announcement, given the government’s limited room for maneuver, others were on the lookout for initiatives that could impact UK housebuilders.

On the domestic UK corporate front, travel firm Thomas Cook (TCG.L) was set for its worst trading day since the British EU referendum in June 2016, falling 10.5 percent after reporting a fall in full-year profit margins.

British drugs company BTG (BTG.L) was leading losers on the FTSE as JP Morgan cut its target price on the stock.

SSP Group (SSPG.L), which operates restaurants and bars at travel locations, posted one of the best performances for European blue-chips with a 6.5 percent jump after beating expectations for full-year results and proposing a special dividend.

British software firm Sage (SGE.L) was up 1.4 percent after reporting a 10 percent rise in organic operating profit.