MW: Oil stocks help drive Europe south as Fed looms
Stada Arzneimittel plunges 16% after warning
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — European stock markets fell Wednesday, with oil, bank and drug shares driving declines, as investors awaited the outcome of the U.S. Federal Reserve’s two-day policy meeting and continued to fret over Greece.
Extending earlier losses, the Stoxx Europe 600 index XX:SXXP -0.89% dropped 1% to 226.98, a day after gaining 1.8% on hopes that Greece would get another round of funding and the Fed would inject stimulus into the U.S. economy.
Equities in Europe bounced around as Wall Street wavered in early action.
Some observers are concerned that the market may be pinning too much on the Fed.
The “general consensus is that it will make little or no difference as this has been tried before and had little impact then,” said Justin Harris, head of trading at Guardian Stockbrokers, in emailed comments.
Two days of conference-call talks between Evangelos Venizelos, Greece’s deputy prime minister and finance minister, and top officials of the so-called troika — the European Union, the European Central Bank and the International Monetary Fund — produced no deal on Greece’s financing needs.
The Finance Ministry said talks would continue over the weekend in Washington, where Venizelos will attend an annual IMF meeting.
Meanwhile, German Chancellor Angela Merkel and Greek Prime Minister George Papandreou are expected to meet Tuesday in Berlin, according to a Dow Jones Newswires report citing Merkel’s spokesman.
Harris said that concerns about Greece are weighing broadly on Europe. “Financial markets need some closure on Greece before moving ahead,” he said.
French banks perk up
Greek stocks maintained gains Wednesday, though other markets fell.
The Athens General Index GR:GD +0.96% rose 0.7%. Shares of Coca-Cola Hellenic Bottling Co. CCH -1.01% added 4%.
French banks turned around earlier losses, with Societe Generale SA FR:GLE +2.07% trading up 1.8% and BNP Paribas SA FR:BNP +1.04% adding up 1.4% but with Credit Agricole SA FR:ACA -0.94% down 2%. Insurer AXA SA FR:CS -1.44% also fell, down 1.4%.
The French CAC 40 index FR:PX1 -0.59% fell 0.5% to 2,967.37, with pharmaceutical group Sanofi SA FR:SAN -1.14% SNY -0.51% moving down 1.4% and giving up part of the prior day’s rally.
Auto stocks also fell, with Peugeot SA FR:UG -3.46% dropping more than 4% and Renault SA FR:RNO -1.73% sliding 1.8%.
