8th Apr 2015 15:58
VIENNA (Alliance News) - The European markets were mixed in early trade Wednesday, but ended the session in negative territory. The decline in Eurozone retail sales and the unexpected drop in German factory orders weighed on sentiment. The surge in energy stocks, following the acquisition of BG Group by Royal Dutch Shell, proved unable to spark a sustainable rally in the markets.
Investors also played it cautious ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting later today. The lack of US economic data is also keeping some investors on the sidelines. Alcoa is slated to release its financial results after the close today, marking the unofficial kick-off to the US earnings reporting season.
Traders continue to monitor the situation in Greece, as it nears Thursday's deadline for the repayment of EUR450 million loan to the International Monetary Fund.
Greek Prime Minister Alexis Tsipras has arrived in Moscow for talks with Russian President Vladimir Putin, amid deepening uncertainty that the debt-laden country may default on its debt obligations. Europe considers Tsipras' visit as a warning shot and fears that the deepening bond with Russia could alienate Greece from the EU.
There were reports that Tsipras is seeing Russia as source of financial aid to meet Greece's commitments to EU. Russia in return is expecting business tie-ups and to use Greece for political mileage, in view of the Ukraine conflict. Though Russia is not enjoying a robust economy, it could help Greece through cheaper energy and investments in shipping, ports and tourism.
The Euro Stoxx 50 index of eurozone bluechip stocks decreased by 0.65%, while the Stoxx Europe 50 index, which includes some major UK companies, added 0.04%.
The DAX of Germany dropped by 0.72% and the CAC 40 of France fell by 0.28%. The FTSE of the UK declined by 0.34% and the SMI of Switzerland finished lower by 0.14%.
In Frankfurt, BMW and Daimler dropped by 1.48% and 1.30%, following downgrades at Kepler Cheuvreux.
RWE declined by 0.86% and E.ON fell by 1.19%.
Deutsche Lufthansa climbed by 1.76%.
In Paris, Air France-KLM, which reported traffic data for the month of March, finished down by 1.15%.
Technip rose by 0.41%, but Total fell by 1.15%.
Peugeot dropped by 2.14%, but Renault increased by 0.95%.
In London, BG Group surged by 26.65%, after it agreed to be acquired by Royal Dutch Shell in a cash and stock deal valued at about 47 billion pounds. Shares of Royal Dutch Shell dropped by 5.32%.
Tullow Oil increased by 4.43% and BP gained 0.54%.
Mining stocks were under pressure after gold prices pulled back. Fresnillo decreased by 2.70% and Randgold Resources lost 2.80%.
Euro area retail sales declined in February for the first time in five months, in line with economists' expectations, data from Eurostat revealed Wednesday. Retail sales fell 0.2% from January, when they grew 0.9%, which was revised from 1.1% reported earlier. The decline was in line with economists' expectations. It was the first fall since a 0.9% drop in September.
German factory orders unexpectedly dropped for a second straight month in February due to stagnation in domestic demand and a decline in foreign bookings, suggesting that activity in the biggest euro area economy remained subdued at the start of the year.
Factory orders dropped a seasonally-and-working-day adjusted 0.9% from January, data from the Economy Ministry showed, defying economists' expectations for a 1.5% gain in the volatile indicator.
Germany's construction sector expanded for the second straight month in March, as new orders increased for the first time in three years, results of a survey from Markit Economics showed Wednesday. The seasonally adjusted purchasing managers' index, or PMI, for the construction sector, rose to 53.3 in March from 53.1 in the previous month. The latest reading was the highest since last November.
The French trade deficit decreased unexpectedly in February, as exports rose faster than imports, figures from the customs office showed Wednesday. The foreign trade deficit shrank to EUR 3.4 billion in February from EUR 3.7 billion in the previous month. The deficit was forecast to increase to EUR 3.8 billion.
Copyright RTT News/dpa-AFX