• Chinese Data a Concern for European Stocks


    by Ben Perry

    LONDON, February 20, 2014 (AFP) – Europe’s main stock markets wavered on Thursday following a slump for share prices across Asia after poorly-received Chinese data and on the outlook for US stimulus.

    The blockbuster sale of smartphone messenger Whatsapp to Facebook and weak earnings at US retail giant Wal-Mart also weighed on sentiment.

    London’s benchmark FTSE 100 index ended the day up 0.24 percent at 6,812.99 points.

    Frankfurt’s DAX 30 dropped 0.43 percent to 9,618.85 points, but the CAC 40 in Paris added 0.33 percent to 4,355.49 points.

    “Another piece of poor data from China … with markets getting no favours from Fed minutes either after the January minutes re-affirmed intentions to wind down stimulus by year-end,” said Toby Morris, a senior trader at CMC Markets.

    US stocks rose Thursday though investors were sour on Facebook’s huge acquisition of WhatsApp.

    In midday trade, the Dow Jones Industrial Average was up 0.42 percent at 16,106.10.

    The broad-based S&P 500 edged up 0.33 percent to 1,834.82, while the tech-rich Nasdaq Composite Index gained just 0.13 percent to 3,657.80.

    The Nasdaq was weighed down by Facebook, which tumbled 1.5 percent after its eye-popping cash-and-stock deal worth up to $19 billion for smartphone messaging service WhatsApp.

    Dow member Wal-Mart Stores dropped 1.86 percent after posting fiscal fourth-quarter earnings that showed an 0.4 percent fall in US sales.

    In foreign exchange deals, the European single currency fell to $1.3696 from $1.3733 late in New York on Wednesday.

    The euro slipped to 82.27 British pence from 82.33 pence, while the pound dipped to $1.6647 from $1.6680.

    On the London Bullion Market, the price of gold fell to $1,316.25 an ounce from $1,320.50 on Wednesday.

    Asian stock markets slumped on Thursday, as China manufacturing data showed the world’s second-largest economy losing strength and Japan logged its worst-ever January trade deficit.

    HSBC’s preliminary reading for its purchasing managers’ index (PMI), which tracks manufacturing activity in China’s factories and workshops, contracted in February to its lowest level in seven months.

    The index, a closely-watched gauge of the health of the Asian economic powerhouse, also tumbled in January, losing ground for the first time in six months.

     

    - BAE shares skid -

     

    On the corporate front, shares in BAE tumbled 8.5 percent to 400.40 pence after the company warned that earnings would drop this year on cuts to government spending in its main market the United States.

    BAE said that 2013 net profit had slumped 82 percent owing to an impairment charge on its US business totalling £865 million ( $1.441 billion, 1.052 billion euros).

    French oil services group Technip meanwhile skyrocketed 9.02 percent to 69.99 euros after confirming its objectives for this year and next.

    Danone shares advanced 1.45 percent to 51.70 euros despite the French dairy food giant reporting a 15.0-percent slump in net profits last year, blaming a false health scare, high milk prices and currency factors in some emerging markets.

    Danone said it expected to return to strong, lasting and profitable growth in the second half of this year, saying that 2014 sales would rise by 4.5-5.5 percent and that operating margins would be broadly stable.

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