EUROPE MARKETS: Italian Banks A Bright Spot As European Stocks Fall Back

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Bank of England's "Super Thursday" update on deck

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European stocks sagged Thursday, easing back from a 21-month high, but a well-received earnings report from UniCredit SpA helped lift Italian bank shares.

The Stoxx Europe 600 index shed 0.2% at 395.76, weighed by losses for the consumer services, utility and telecom sectors. But shares of commodity, tech and consumer goods companies advanced.

The pan-European index on Wednesday rose 0.2% to end at its highest since August 2015. That move was aided by a stretch higher for oil prices after U.S. weekly crude supplies fell by a larger-than-expected amount (http://www.marketwatch.com/story/oil-prices-extend-gains-as-eia-reports-larger-than-expected-drop-in-us-crude-supplies-2017-05-10).

Crude oil futures were up more than 1% on Thursday, and that contributed to a 0.4% gain for the Stoxx Europe 600 Oil & Gas index

Banks on the up: UniCredit shares (UCG.MI) climbed 4% after the Italian lender swung to a first-quarter profit of 907 million euros (http://www.marketwatch.com/story/unicredit-reports-profit-of-907-million-euros-2017-05-11) ($986 million), reflecting efforts to clean up its balance sheet. The bank lost more than EUR13 billion in the fourth quarter.

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Meanwhile, Mediobanca SpA (MB.MI) picked up 2.8% after the Italian bank notched a 39% rise in profit for the first nine months of the year.

Those gains contributed to a 1.8% rise in the FTSE Italia All-Share Banks index that pushed the benchmark to its highest level since March 2016, FactSet data showed.

But the broader Stoxx Europe 600 Bank index turned flat after rising as much as 0.2%. French lender Credit Agricole SA (ACA.FR) said profit more than tripled (http://www.marketwatch.com/story/credit-agricole-profit-more-than-triples-2017-05-11) to EUR845 million in the first quarter. But its shares turned lower, down 0.9%.

BOE's 'Super Thursday': Investors on Thursday will keep watch for the Bank of England's updates on its inflation and economic growth outlooks, which will be released alongside the BOE's latest decision on interest rates. The U.K. central bank is expected to leave the rate at 0.25%.

"Although market participants are confident that interest rates won't change today, there seems to be divided opinion on what messages we'll receive, due to the mixed economic data releases in the past couple of weeks," said FXTM chief market strategist Hussein Sayed in a note.

"The central bank will also take into consideration the political hurdles of the snap general election on 8 June and U.K.'s negotiations with the EU," he said. "The base case scenario is to wait and see until we get more clarity on both the economic and political outlook."

The U.K.'s FTSE 100 was down 0.1% at 7,381.55 ahead of the "Super Thursday" trio of releases, due at noon London time, or 7 a.m. Eastern Time.

National indexes: The German DAX 30 index shed 0.1% at 12,750.59 after reaching another record close Wednesday. France's CAC 40 gave up 0.1% to 5,394.95.

Read:The ECB has 3 big reasons to wind up QE -- here's why it shouldn't (http://www.marketwatch.com/story/the-ecb-should-avoid-the-temptation-to-cancel-qe-2017-05-10)

The euro fetched $1.0886, up slightly from $1.0870 late Wednesday in New York.

(END) Dow Jones Newswires

May 11, 2017 05:27 ET (09:27 GMT)