12th Oct 2016 16:29
VIENNA (Alliance News) - The majority of the European markets ended Wednesday's session in negative territory. Technology stocks were under pressure after the profit warning issued by Ericsson. Energy stocks also struggled due to concerns that Russia may not follow through with production cuts.
Traders were also in a cautious mood ahead of the release of the minutes from the Federal Reserve's September meeting. Investors are hopeful that the minutes, which will be released after the close in Europe, will provide some clues regarding the outlook for US interest rates. While no one is expecting a move in November, due to the US presidential race, many believe a December rate hike is likely.
Investor concerns over a "hard Brexit" eased after the UK Prime Minister Theresa May has allowed the UK Parliament to decide on the Brexit strategy.
Bloomberg reported that May has accepted the motion from the opposition Labour Party calling for a "full and transparent debate on the government's plan for leaving the EU."
The UK Parliament will debate a motion that enable the MPs to "properly scrutinise that plan" before triggering Article 50, the formal mechanism of withdrawing from the EU. Late Tuesday, May approved an amendment that effectively accepted the motion, while suggesting that the government will reject any attempt to block Brexit or "undermine the negotiating position of the government."
Serious concerns over the sustainability of Greece's public debt and the return of confidence on the economy is still gradual, European Central Bank Executive Board member Benoit Coeure said Wednesday.
"All stakeholders in the Greek adjustment programme realise that there are serious concerns about the sustainability of Greek public debt," Coeure said in a hearing at the European Parliament.
"A discussion is currently ongoing in the Eurogroup on the short-term, medium-term and long-term measures needed to secure the sustainability of Greek debt."
Greece needs to do more to safeguard financial stability, ensure sustainable economic recovery and regain access to international capital markets, the policymaker said.
The pan-European Stoxx Europe 600 index weakened by 0.46%. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.42%, while the Stoxx Europe 50 index, which includes some major UK companies, lost 0.45%.
The DAX of Germany dropped 0.51% and the CAC 40 of France fell 0.44%. The FTSE 100 of the UK declined 0.66% and the SMI of Switzerland finished lower by 0.82%.
In Frankfurt, chemical giant BASF dipped 0.06% after reporting better-than-expected results for the third quarter of 2016.
Deutsche Bank gained 0.41% on reports that it boosted its private bond sale to USD4.5 billion.
Deutsche Lufthansa climbed 4.04% after an upgrade by analysts at Kepler Cheuvreux.
In Paris, Sanofi fell 1.15%. The drug maker said it expects to record USD100 million charge in the third quarter to reflect litigation related to Cipro generic.
In London, Premier Foods sank 6.22%. The food manufacturer lowered its full-year revenue outlook after posting a drop in second-quarter sales due to warm weather.
Domino's Pizza Group tumbled 5.15% despite reporting a rise in Q3 underlying sales in the UK.
Fresnillo lost 0.67%. The miner backed its full-year output forecast after reporting higher gold and silver output in the third quarter.
Ericsson plunged 20.21% in Stockholm after a profit warning. Peer Nokia lost 5.13% in Helsinki.
Eurozone industrial production recovered in August as output grew in major factory sectors except non-durable consumer goods, boosting hopes of positive contribution to GDP growth. Industrial production expanded 1.6% in August from July, when it fell by a revised 0.7%, data from Eurostat showed Thursday. Output was forecast to grow 1.5%.
Eurozone house prices increased at a slower pace in the second quarter, Eurostat reported Wednesday. House prices grew 2.9% year-on-year, slower than the 3.1% increase seen in the first quarter.
Germany's wholesale prices fell at a slower pace in September, data from Destatis showed Wednesday.
Wholesale prices declined 0.3% in September from last year, slower than the 1.2% decrease seen in August.
France's inflation doubled as initially estimated in September, final data from the statistical office Insee showed Wednesday. Consumer prices advanced 0.4% annually, faster than the 0.2% increase seen in August. This was the fastest since October 2014, when inflation was 0.5%.
UK house purchase lending increased in August, the Council of Mortgage Lenders said Wednesday. Home-owners borrowed GBP 12.2 billion for house purchase, up 14% month-on-month and 11% year-on-year.
Copyright RTT News/dpa-AFX