EUROPE MARKETS: European Stocks Inch Higher After Sharpest Selloff In 9 Months

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Bayer warns on earnings; Stoxx 600 heads for June loss

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European stocks edged higher Friday, with technology and consumer-related shares on the mend after a hefty selloff, but the region's benchmark was still on track to finish June in the red.

The Stoxx Europe 600 rose 0.3% to 381.62, with industrial, telecom and financial shares printing gains. But oil and gas, basic material and health care stocks were losing ground.

The pan-European index was on course to fall 1.6% for the week, which would contribute to a potential loss of 2.2% for the month. The benchmark faces a scant 0.1% gain for the second quarter.

European equities sank a collective 1.3% on Thursday (http://www.marketwatch.com/story/european-stocks-step-lower-as-euro-rally-outweighs-gains-for-banks-miners-2017-06-29), the worst percentage loss since late September 2016. Regional stocks have been put under pressure by hefty gains by the euro as well as the British pound .

"Rising yields in U.K. and European bonds are driving the moves in sterling and the euro -- both of which are up more than 2% on the dollar this week -- with the slew of commentary from prominent central bankers being deemed much more hawkish than anticipated," said Craig Erlam, Oanda's senior market analyst.

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"The quite deliberate shift, particularly from the Bank of England, is a significant shift from policy makers with previous comments being broadly neutral or erring on the dovish side," he said.

See:Here's why the stock market is spooked by central bankers (http://www.marketwatch.com/story/heres-why-the-stock-market-is-spooked-by-central-bankers-trump-agenda-delays-2017-06-29)

A stronger euro and pound can reduce revenue and earnings made overseas by international companies with heavy weighting on indexes across Europe and on the U.K.'s FTSE 100.

The euro on Friday was buying $1.1409, edging back from $1.1442 late Thursday. Sterling was trading at a six-week high above $1.30.

Yields on 10-year German government bonds built on gains early Friday to reach 0.471%, from 0.451% on Thursday.

Investors will watch for moves in the euro after the release of the first reading of eurozone inflation for June, due at 10 a.m. London time, or 5 a.m. Eastern Time.

Stock movers: Shares of Bayer AG (BAYN.XE) were knocked back 4.4% after the German pharmaceuticals and chemicals heavyweight warned earnings would take a hit (http://www.marketwatch.com/story/bayer-warns-on-earnings-on-high-brazil-inventories-2017-06-30) because of unexpectedly high inventories at its operations in Brazil.

"Bayer is also expecting earnings to be additionally impacted by unfavorable currency developments," it added.

German food-delivery company Delivery Hero AG (DHER.FF) made its trading debut on the Frankfurt Stock Exchange, with shares priced at 25.50 euros to allow the startup to raise more than EUR1 billion.

Individual indexes: In Frankfurt, the export-heavy DAX 30 turned lower by 4 points to 12,412. In Paris, the CAC 40 index picked up 0.2% at 5,164.55 after Thursday's selloff of 1.9%. The index was on course for a June fall of 2.3%.

The FTSE 100 lost 0.2% to 7,333.24.

Read:Dollar bulls have a lot to worry about in second half of 2017 (http://www.marketwatch.com/story/dollar-bulls-have-a-lot-to-worry-about-in-second-half-of-2017-2017-06-29)

(END) Dow Jones Newswires

June 30, 2017 04:51 ET (08:51 GMT)