MW: Europe stocks waver with Japan, China in focus
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets showed mixed moves on Friday, as a new monetary stimulus package in Japan supported sentiment, while higher-than-expected inflation data from China sent mining firms lower.
The Stoxx Europe 600 index XX:SXXP -0.27% was off 0.3% at 286.73, on track for a 0.4% weekly loss. On the year, however, it was still up 2.5%.
“The markets have had a New Year euphoria rally, but whether it can sustain it is to be questioned. No one actually wants to take any further positions ahead of the weekend,” said Justin Urquhart Stewart, co-founder of Seven Investment Management.
“The one thing that has returned to the market is confidence. The market always wants to go up, but couldn’t do it because of uncertainty. Now that we have gotten past the fiscal fudge in the U.S. and we see better news globally there are reasons to move forward,” he said.
Among notable movers in the pan-European index, some drug makers were on the rise, after UBS upgraded the pharmaceutical sector to overweight from neutral and highlighted it as its preferred defensive play.
Shares of Roche Holdings AG CH:ROG +0.99% gained 1%, Novartis AG CH:NOVN +0.34% rose 0.3% and Novo Nordisk AS DK:NOVOB +0.52% NVO +1.11% moved 0.5% higher.
Pointing in the other direction, shares of Getinge AB SE:GETIB -7.74% tanked 7.9%. The Swedish medical-equipment firm said demand for its products weakened during the final quarter of 2012, making net profit before taxes for the full year fall short of expectations.
Investors trained their attention on Japan, where the government approved a 10.3 trillion yen ($116 billion) stimulus package aimed at boosting GDP growth by 2 percentage points and creating 600,000 jobs. See: ‘Abenomics’ gaining traction in Japan—and Google searches
Data from China, however, countered any lift in sentiment from Japan’s efforts. Consumer prices rose to a seven-month high in December, stoking fears that additional stimulus measures are off the table. The consumer-price index climbed 2.5%, with food prices jumped 4.2%. See: China consumer inflation quickens on food costs
Mining companies, which are sensitive to growth in China, dropped on the news, with shares of BHP Billiton PLC UK:BLT -2.88% BHP -0.34% AU:BHP -1.95% down 2.9%, Rio Tinto PLC UK:RIO -1.51% RIO +0.16% AU:RIO -1.94% off 1.5% and Anglo American PLC UK:AAL -1.59% dropping 1.6%.
Also in London, shares of insurer Aviva PLC UK:AV +3.04% rose 3%. Citigroup lifted the firm to buy from neutral, saying it is one of the most attractive opportunities in the sector.
On the data front in the U.K., a report on manufacturing production for November showed a 0.3% decline, missing analyst expectations of a 0.5% increase.
The U.K.’s FTSE 100 index UK:UKX +0.15% traded 0.2% higher at 6,111.08.
Germany’s DAX 30 index DX:DAX +0.00% was marginally higher at 7,708.55.
Shares of Deutsche Lufthansa AG DE:LHA -1.09% dropped 2%, after UBS downgraded the airline to neutral from buy.
And in France, shares of Electricite de France SA FR:EDF -2.56% lost 2.1%, after Credit Suisse cut the stock to underperform from neutral, citing weakening earnings and cash flows.
The CAC 40 index FR:PX1 -0.27% gave up 0.3% to 3,693.00.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
