LONDON (MarketWatch) — European shares were marginally higher on Friday, with retailers in focus after trading updates from Carrefour and Hennes & Mauritz, while Old Mutual dropped after talks to sell its stake in Nedbank failed.
The Stoxx Europe 600 Index (ST:SXXP 265.22, -0.46, -0.17%) edged up less than 0.1% to 265.78.
The U.K. FTSE 100 index (UK:UKX 5,702, -24.77, -0.43%) slipped 0.2% to 5,716.54, the French CAC 40 index (FR:PX1 3,818, -0.79, -0.02%) rose 0.2% to 3,825.82 and the German DAX 30 index (DX:DAX 6,471, +15.61, +0.24%) gained 0.3% to 6,471.77.
Justin Urquhart Stewart, co-founder of Seven Investment Management, said markets are still looking relatively positive, but that there is concern that all three asset classes of equities, bonds and commodities are all moving in the same direction.
“Something is going to give at some stage, I guess it’s buy on the rumor, sell on the fact,” he said.
“The rumor is quantitative easing and the fact is something will give when it comes through,” Stewart added, saying he expects investors to start taking profits when an official Federal Reserve announcement eventually comes.
French retail giant Carrefour (FR:CA 38.51, -1.64, -4.07%) was one of the biggest movers, dropping 4% in Paris after the company said late Thursday that it would take further charges on its Brazilian operations.
The world’s No. 2 retailer trimmed its guidance on the back of the new charges in Brazil, which now stand at around 180 million euros ($254 million). See full story on Carrefour.
Swedish fashion retailer Hennes & Mauritz (SE:HMB 241.00, +1.20, +0.50%) also provided a trading update Friday. Shares in the group rose 0.7% after H&M said same-store sales rose 8% in September, beating the 5.6% consensus forecast of analysts. Total sales growth was 16%, in line with expectations.
Also in Sweden, telecoms group Ericsson (SE:ERICB 71.20, -0.95, -1.32%) dropped 1.4% after its Sony Ericsson mobile-phone joint venture with Sony Corp. (SNE 32.22, +0.27, +0.85%) reported earnings and unit sales slightly below market expectations.
Bank stocks were mostly higher, particularly in the U.K., as they rebounded from heavy losses over the last couple of sessions that were prompted by Standard Chartered’s (UK:STAN 1,893, +5.00, +0.27%) surprise plan to raise capital on Wednesday.
Barclays PLC (UK:BARC 283.70, +3.75, +1.34%) (BCS 18.25, +0.35, +1.96%) rose 1.8% and Lloyds Banking Group (UK:LLOY 71.03, +0.56, +0.80%) (LYG 4.52, +0.03, +0.67%) gained 1.3%.
Reuters reported that Barclays is working on a new capital instrument that would allow it to meet stricter capital demands without tapping shareholders for more cash. The report said the holders of the bond would automatically suffer a 30% cut in the value of their holding if capital fell below a certain level.
Broker notes also affected several stocks. Pernod Ricard (FR:RI 62.42, -1.40, -2.19%) dropped 2.1% in Paris after the drinks company was downgraded to underperform from neutral at Credit Suisse.
In London, aerospace and defense firms Rolls Royce Group (UK:RR. 637.00, +9.00, +1.43%) and Cobham (UK:COB 239.30, -0.60, -0.25%) rose 1.3% and 2.2% respectively, after both stocks were upgraded to conviction buy from neutral at Goldman Sachs.
Life insurer Old Mutual (UK:OML 136.80, -8.40, -5.79%) dropped 6.3% after HSBC Holdings (UK:HSBA 659.20, -3.10, -0.47%) (HBC 52.59, -0.46, -0.87%) ended talks to buy its majority stake in South African lender Nedbank.
