Vodafone falls after disappointing update; Heineken, LSE up on deal news
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — European stocks extended losses in light trade Friday as investors tracked quarterly earnings results and Spanish bond yields saw renewed upward pressure on continued jitters over the region’s long-running debt crisis.
The Stoxx 600 Europe index XX:SXXP -0.95% fell 0.5% to 260.54, paring the index’s weekly gain to 1.1%.
A German newspaper quoted Gerda Hasselfeldt, a senior member of the Christian Social Union, the sister party to Chancellor Angela Merkel’s Christian Democratic Union, as saying the party would back a Greek exit from the shared currency if Athens doesn’t comply with existing bailout terms. Read about the comments.
Spanish bond yields rose, with the 10-year yield ES:10YR_ESP +2.35% rising 0.08 percentage point to 7.06%, according to electronic trading platform Tradeweb, even as investors awaited the outcome of a conference call of euro-zone finance ministers that’s expected to result in approval of a bailout plan for the country’s ailing bank sector.
Shares of Vodafone Group PLC UK:VOD -2.73% lost 2.3% in London, weighing heaviest on the index after the mobile giant reported worse-than-expected fiscal first-quarter revenues on Friday.
Among major indexes, London’s FTSE 100 UK:UKX -0.76% fell 0.3% to 5,696.78. The German DAX 30 index DX:DAX -1.05% was virtually flat at 6,758.67. In Paris, the CAC 40 stock index FR:PX1 -1.42% declined 0.2% to 3,256.91.
“Conflicting forces seem to be at work across asset markets. On the one hand, growth prospects are broadly weaker, and on the other, policy intervention continues to surprise on the proactive side,” wrote strategists at Barclays in London.
“As a result, major asset classes will likely continue to move sideways in coming days, with realized volatility remaining contained and implied volatility capped,” they wrote.
U.S. Federal Reserve Chairman Ben Bernanke, in congressional testimony this week, offered no hint that another round of quantitative easing is imminent, but said the central bank was prepared to use its tools if needed.
Banks were under pressure. UBS AG CH:UBSN -3.24% fell more than 2%, while HSBC Holdings PLC UK:HSBA -1.47% lost 1.4%.
Shares of Dutch brewer Heineken N.V. NL:HEIA +1.08% rose 1% in Amsterdam after it offered buy Singapore beverage firm Fraser & Neave Ltd.’s entire stake in Asia Pacific Breweries Ltd. for 5.1 billion Singapore dollars ($4.06 billion). Analysts said the move could trigger a takeover fight between Heineken and suitors tied to Thailand tycoon Charoen Sirivadhanabhakdi. Read about Heineken's bid
Shares of London Stock Exchange Group PLC were u UK:LSE -0.29% up 0.6%, paring an earlier gain after Singapore Exchange Ltd. denied it was in talks with the LSE for a potential merger, but said it was open to collaborations and partnerships that may benefit its shareholders. A representative from LSE declined to comment on the news on Friday. Read about merger talk
Shares of miner Anglo American PLC UK:AAL +1.13% rose 1.1% after it reported a 12% quarterly rise in iron-ore output to 12.9 million metric tons.
Auto makers were on the rise, with Germany’s Daimler AG DE:DAI +0.24% up 0.8% and rival BMW AG DE:BMW +0.25% gaining 1%.
Spain’s IBEX 35 index XX:IBEX -3.62% fell 2.3% to 6,480.60.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt.
