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European Markets Continue To Fall As Euro Rises

The European markets got off to a positive start Tuesday, but most quickly slipped back into negative territory, extending their recent losing streak. Shares of exporters were under pressure due to an increase in the value of the Euro. The currency was driven higher by the release of some better than expected German economic data.

Forward guidance has evolved into a full-fledged monetary policy tool and has been successful, European Central Bank President Mario Draghi said Tuesday.

Speaking at the ECB's first conference on central bank communication in Frankfurt, Draghi said, "Forward guidance was initially protective and not proactive, and it worked."

He was part a four-member panel, which included US Fed Chair Janet Yellen, Bank of England Governor Mark Carney and Bank of Japan Chief Haruhiko Kuroda, discussing central bank communication.

The pan-European Stoxx Europe 600 index weakened by 0.58 percent. The Euro Stoxx 50 index of eurozone blue chip stocks decreased 0.59 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.77 percent.

The DAX of Germany dropped 0.31 percent and the CAC 40 of France fell 0.49 percent. The FTSE 100 of the U.K. declined 0.01 percent, but the SMI of Switzerland finished lower by 0.35 percent.

In Frankfurt, Manz rallied 6.41 percent. The high-tech equipment manufacturer affirmed its FY revenue outlook after narrowing its nine-month loss.

Bilfinger shares jumped 7.28 percent. The engineering services firm posted its first organic rise in output volume after three years of decline.

Chipmaker Infineon Technologies climbed 2.72 percent after lifting dividend and saying it expects year-on-year revenue growth of about 9 percent, plus or minus 2 percentage points, for the 2018 fiscal year.

Henkel tumbled 4.65 percent. The company warned of difficult conditions in the consumer goods market and said "currency effects will have an increasingly negative impact."

In Paris, Alstom jumped 3.36 percent after reporting a surge in first-half profit and affirming its 2020 outlook.

In London, Tesco shares advanced 6.24 percent. Its £3.7bn takeover of cash-and-carry group Booker has been provisionally cleared by the competition regulator. Booker also soared 6.75 percent.

Mobile giant Vodafone gained 5.12 percent after a positive trading update.

Homebuilder Bovis Homes rose 2.85 percent after a bullish trading update. "The demand for new homes continues to be robust across all our regions and customer interest remains good," the company said in a statement.

Technology firm Smiths Group dropped 1.59 percent after its first-quarter underlying revenue fell 2 percent.

Hikma Pharmaceuticals declined 0.88 percent after acquiring six products from Boehringer Ingelheim.

Credit Suisse rose 0.13 percent in Zurich after it agreed to pay $135 million to resolve currency-manipulation allegations by the U.S. authorities.

The euro area economy expanded at a slightly slower pace, as initially estimated, in the third quarter, flash data from Eurostat showed Tuesday. Gross domestic product grew 0.6 percent sequentially, slightly slower than the 0.7 percent expansion seen a quarter ago.

Eurozone industrial production dropped for the first time in three months in September, data published by Eurostat showed Tuesday. Industrial production fell 0.6 percent month-on-month, reversing a 1.4 percent rise in August. The monthly decline came in line with expectations. This was the first decline since June.

Germany's economic confidence rose to a 6-month high in November, survey data from Mannheim-based think tank ZEW showed Tuesday.

The ZEW Indicator of Economic Sentiment for Germany rose to 18.7 in November from 17.6 in October. This was the highest score since May, when the reading was 20.6. Nonetheless, the score was below the expected level of 19.5.

Germany's economic growth accelerated in the third quarter, data published by the Federal Statistical Office showed Tuesday. Gross domestic product grew 0.8 percent sequentially, faster than the 0.6 percent expansion logged in the second quarter. The growth rate was forecast to remain at 0.6 percent.

Germany's inflation slowed as initially estimated in October, final data from Destatis showed Tuesday. The consumer price index rose 1.6 percent year-on-year following 1.8 percent climb in September. A similar slower rate was last seen in June.

UK inflation held steady at the strongest level in more than five years in October as higher cost of food was offset by cheaper motor fuel prices. Consumer prices climbed 3 percent year-on-year in October, the same pace as seen in September, the Office for National Statistics reported Tuesday. Inflation was expected to accelerate to 3.2 percent.

British house price inflation accelerated in September to the highest level in almost a year, figures from the Office for National Statistics showed Tuesday. The house price index climbed 5.4 percent year-over-year in September, faster than the 4.8 percent rise in August, which was revised down from a 5.0 percent increase reported earlier.

China's industrial production and retail sales growth decelerated in October and property investment cooled, as measures taken to curb excessive debt and factory pollution weighed on activity.

Industrial production grew 6.2 percent year-on-year in October, but slower than the 6.6 percent expansion seen in September, data from the National Bureau of Statistics showed Tuesday. This was also weaker than the expected growth of 6.3 percent.

Likewise, retail sales growth eased to 10 percent from 10.3 percent in September. Economists had forecast growth to improve to 10.5 percent.

Producer prices in the U.S. increased by more than expected in the month of October, according to a report released by the Labor Department on Tuesday. The Labor Department said its producer price index for final demand climbed by 0.4 percent in October, matching the increase seen in September. Economists had expected prices to inch up by 0.1 percent.

by RTT Staff Writer

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