EUROPE MARKETS: European Stocks Pull Back After Biggest Rally In 2 Months

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

Trading volumes are expected to be thin because of July 4th holiday in the U.S.

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European stocks edged lower on Tuesday, with the benchmark index pulling back after its biggest rally in two months as a North Korean missile launch rattled investors.

The Stoxx Europe 600 index fell 0.1% to 382.92, on track for its first loss this week. The index on Monday rallied 1.1% (http://www.marketwatch.com/story/european-stocks-rebound-from-2-month-low-as-banks-oil-giants-climb-2017-07-03) for its biggest one-day percentage gain since April 24, buoyed by rises for banks and oil giants.

Trading volumes on Tuesday could be lower than usual as Americans traders are out for the Independence Day holiday.

Read:July 4th: Which markets are closed? (http://www.marketwatch.com/story/july-4th-which-markets-are-closed-2017-06-30)

North Korea tensions: The pullback on Tuesday came as investors assessed the latest developments in North Korea. State media claimed the country has successfully test-launched an intercontinental ballistic missile (http://www.marketwatch.com/story/north-korea-claims-successful-test-firing-of-an-icbm-2017-07-04), an advance in its attempt to threaten the U.S. with a nuclear weapon.

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Traditional safe haven trades, such as gold and the yen, benefited from the geopolitical uncertainty. Gold added 0.4% to $1,223.60 an ounce, while the dollar bought Yen113.17, compared with Yen113.38 late Monday in New York.

"The market reaction to geopolitical tensions may be elevated slightly with the U.S. on public holiday for Independence Day today, however, once the moves begin to settle, the market is likely to view the rebounds on the safe haven plays such as gold and the yen as another chance to sell," said Richard Perry, market analyst at Hantec Markets, in a note.

Worldpay surges: Shares of payments processor Worldpay Group PLC (WPG.LN) surged 24% after the company confirmed it has been approached by Vantiv Inc. (VNTV) and J.P. Morgan Chase & Co. (JPM) about possible takeovers (http://www.marketwatch.com/story/worldpay-shares-soar-after-takeover-approaches-2017-07-04).

Worldpay said, "There can be no certainty either that an offer will be made."

The confirmation comes a day after Danish digital-payments company Nets AS (NETS.KO) also said it has been approached by potential buyers. Nets rose 3.4% on Tuesday.

German payments processing company Wirecard AG (WDI.XE) also jumped on Tuesday, up 4.8%.

Stock movers: Shares of J Sainsbury PLC (SBRY.LN)(SBRY.LN) pared earlier gains, but were still up 0.9% after the supermarket chain said first-quarter same-store sales rose 2.3% (http://www.marketwatch.com/story/sainsbury-sales-rise-cost-savings-on-track-2017-07-04) and that its cost savings plan is on track.

Stada Arzneimittel AG (SAZ.XE) shares rose 2.5% after the German drugmaker said Bain Capital and Cinven were considering asking for regulatory permission to launch a new takeover offer (http://www.marketwatch.com/story/stada-bain-cinven-seeking-regulator-ok-for-fresh-takeover-bid-2017-07-04). The financial investors' earlier offer valuing Stada at 5.3 billion euros failed in June (http://www.marketwatch.com/story/stada-takeover-by-baincinven-fails-2017-06-27), as shareholders didn't tender enough shares to reach the minimum acceptance required.

SKF AB (SKF-B.SK) lost 1.1% after the ball bearings manufacturer said it is being sued by German car maker Daimler AG (DAI.XE) as a consequence of a 2014 European Union settlement decision over violation of competition rules.

Ryanair Holdings PLC (RYAAY) put on 0.4%. The discount airline said passenger traffic had increased to 11.8 million customers in June, a gain of 12% year-over-year.

Individual indexes: The FTSE 100 index shed 0.1% (http://www.marketwatch.com/story/ftse-100-falls-back-into-the-red-as-oil-majors-and-miners-decline-2017-07-04) to 7,368.28, under pressure from falls for the U.K. benchmark's oil companies and banks.

Germany's DAX 30 index slipped 0.2% to 12,447.96, while France's CAC 40 index lost 0.2% to 5,186.06.

The euro was down at $1.1348, compared with $1.1365 late Monday in New York.

Economic news: Producer prices in the eurozone fell more than expected in May (http://www.marketwatch.com/story/eurozone-may-producer-prices-fall-more-than-seen-2017-07-04), down 0.4% month-on-month. Economists had expected a fall of 0.2%.

Growth in the U.K. construction sector slowed down in June, with the construction purchasing managers index falling to 54.8 from 56.0 in May.

In Sweden, the Riksbank said it's now "less likely" than before to cut rates as inflation has been higher than expected. That means that the central bank -- long seen as extremely dovish -- has joined the European Central Bank and Bank of England in signaling an end to ultraloose monetary policy.

(END) Dow Jones Newswires

July 04, 2017 05:48 ET (09:48 GMT)