Volkswagen, Ryanair limit gains for European stocks – MarketWatch

Posted: Monday, February 06, 2017

European stocks weaved between small gains and losses Monday, with the market largely adrift before an appearance by European Central Bank President Mario Draghi.

The Stoxx Europe 600 index

SXXP, -0.16%

 was down less than 1 point at 364.94, and has been darting in between positive and negative territory. Only the health care, utility and oil and gas groups were moving higher. The pan-European index on Friday rose 0.6%, a move that trimmed its weekly loss to 0.6%.

Investors on Monday will watch for comments from European Central Bank President Mario Draghi who will testify in Brussels before the Economic and Monetary Affairs Committee at the European Parliament. The meeting is slated to start 3 p.m. London time, or 10 a.m. Eastern Time.

“The question of the ECB’s incredibly large stimulus package will be very much in focus today. If he in any way concedes or even hints that the ECB is winding down their purchasing policy, it could send the euro soaring,” said Mati Greenspan, senior market analyst at eToro, in a note. “After all, the euro weakness that we’ve seen over the last few years is largely due to their aggressive spending habits.”

The euro

EURUSD, -0.6119%

 was buying $1.0743 on Monday, compared with $1.0779 late Friday.

Movers: In Frankfurt, Volkswagen

VOW3, -1.32%

VLKAY, +0.65%

 shares were pulled down 1.9% following news that the auto maker is facing its first lawsuit from a large German customer stemming from Volkswagen’s emissions-rigging scandal. German newspaper Bild am Sonntag said fish distributor Deutsche See is seeking €11.9 million in damages. The company leases 500 vehicles from Volkswagen, according to the report.

Meanwhile, investors pushed shares of Ryanair Holdings PLC

RY4C, -2.30%

lower by 2.8%. The airline said third-quarter net profit fell nearly 8% to €94.7 million as a glut of seats for sale in the European airline industry continued to hurt ticket prices.

In Milan, UniCredit SpA

UCG, -51.80%

 shares fell 3.7% to €12.63 as the Italian lender’s €13 billion share sale got underway. Shares in the rights issue were priced at a 38% discount on a theoretical ex-rights price. The move is aimed at bolstering capital at UniCredit, which has had to write down bad loans.

But advancers included Randgold Resources

RRS, +4.88%

GOLD, +0.06%

 . Its shares jumped 4.8% as the gold producer posted a 76% leap in fourth-quarter net profit to $78.5 million, and raised its final dividend by 52% to $1 a share.

France watch: François Fillon, the conservative candidate in the country’s presidential election, is expected to hold a press conference at 3 p.m. London time. Fillon’s campaign has been plunged into crisis stemming from a criminal investigation into whether his wife has received a state salary without performing any work. Various news reports indicate he may launch a counter-attack against the allegations.

But Fillon may also withdraw from the race, and that would strengthen the position of French far-right leader Marine Le Pen in the race, said Naeem Aslam, chief market analyst at Think Markets UK, in a note.

“Frexit is a major threat for the eurozone and Le Pen’s anti-globalization rhetoric has gained a lot momentum in France and this can shake the core of the eurosystem,” he said.

Data: European stocks were overall little changed after strong economic data from Germany, Europe’s largest economy. Industrial orders climbed 5.2% on a seasonally adjusted basis in December, the highest rate since July 2014. The reading from Destatis outstripped expectations of a 0.75% rise in a FactSet survey of analysts. Domestic orders climbed by 6.7% during the month.

“It is difficult to read much into the factory orders series due to its volatility. The slowdown in nominal wage growth could be a sign of second-round effects of low headline inflation, which would be a worry for the ECB,” said economists at Citi in a note. “With inflation potentially around 2% year-over-year in 2017, real income growth and thus possibly consumer spending, will be under pressure.”

Indexes: France’s CAC 40

PX1, -0.36%

turned down by 0.2% to 4,818.07. Germany’s DAX 30 index

DAX, -0.66%

also turned lower, losing 0.5% at 11,593.07.

Italy’s FTSE MIB

I945, -1.41%

 dropped 1.1% to 18,905.97 and the U.K’s FTSE 100

UKX, -0.01%

picked up 0.1% at 7,195.


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