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European Markets Weaken Further On U.S. Tax Reform Concerns

The European markets ended Friday's session in the red, extending their weakness from the past few sessions. Investors continue to keep an eye on the tensions in the Middle East, but were most concerned about the outlook for U.S. tax reform at the end of the trading week.

Senate Republicans released their version of a tax bill. The Senate bill includes some significant differences from the House version, including a delay in the implementation of a cut in the corporate tax rate.

While the Senate version still reduces the corporate tax rate to 20 percent from 35 percent, the new rate would not take effect until 2019. The House bill would start the 20 percent rate next year.

The pan-European Stoxx Europe 600 index weakened by 0.37 percent. The Euro Stoxx 50 index of eurozone blue chip stocks decreased 0.52 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.42 percent.

The DAX of Germany dropped 0.42 percent and the CAC 40 of France fell 0.50 percent. The FTSE 100 of the U.K. declined 0.68 percent and the SMI of Switzerland finished lower by 0.48 percent.

In Frankfurt, Allianz Group slid 0.12 percent. The insurer announced a new 2 billion euro share buyback plan despite reporting lower operating profit for the third quarter.

Telecommunications and web content provider Freenet rallied 1.06 percent after posting higher third-quarter sales and earnings.

In Paris, steel pipe maker Vallourec tumbled 10.22 percent despite the company posting turnaround results for the third quarter of 2017.

Fuel company Rubis jumped 3.27 percent on solid third-quarter results.

In London, luxury brand Burberry Group fell 3.01 percent to extend Thursday's losses. UBS downgraded its rating on the stock to "Neutral" from "Buy."

Vedanta Resources fell 1.58 percent after reporting a 37 percent rise in half-year profit.

Richemont dropped 3.82 percent in Zurich after it reported results for the first half of the year.

Arcelor Mittal jumped 3.37 percent in Amsterdam. The world's largest producer of steel sounded upbeat about 2018 after posting better-than-expected core profit for the third quarter.

Leonardo sank 21.55 percent in Milan after the high-tech company cut its 2017 targets.

France industrial production rebounded in September, data from the statistical office Insee showed Friday. Industrial production grew by more-than-expected 0.6 percent month-on-month in September, reversing a 0.2 percent fall in August. Production was forecast to grow 0.5 percent.

UK industrial production grew at the fastest pace thus far this year in September and exceeded economists' expectations to end the third quarter on a strong note.

Industrial production rose 0.7 percent from August, when it increased 0.3 percent, preliminary data from the Office for National Statistics showed Friday. Growth was more than double the 0.3 percent gain economists had forecast.

The UK visible trade deficit decreased in September, data published by the Office for National Statistics showed Friday. The visible trade deficit fell to GBP 11.25 billion in September from GBP 12.35 billion in August. The expected level of shortfall was GBP 12.8 billion.

After reporting a jump in U.S. consumer sentiment in the previous month, the University of Michigan released a report on Friday showing a bigger than expected pullback in sentiment in the month of November.

The report said the preliminary reading on the consumer sentiment index for November came in at 97.8 compared to the final October reading of 100.7. Economists had expected the index to dip to 100.0.

by RTT Staff Writer

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