Euro drops below $1.19; Eurozone inflation rises in August
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European stocks moved higher Thursday, as basic resources shares rose following better-than-expected manufacturing data from China, but retail shares struggled after a warning from French supermarket chain Carrefour SA.
The Stoxx Europe 600 index picked up 0.8% to 373.91, led by the basic materials and industrials groups, but the consumer services sector fell.
But the regional benchmark was on track for a fall of 1% for August, which would mark its third straight monthly decline. Stocks have been hurt in part by strength in the euro , which recently hit a more than two-year high against the U.S. dollar and a roughly eight-year high against the pound .
Euro strength is a worry for a growing number of policy makers at the European Central Bank, raising the chance the ECB's asset-purchases will be phased out only at a slow rate, according to a Reuters report Thursday (http://uk.reuters.com/article/us-ecb-policy-idUKKCN1BB15J), which cited anonymous sources.
The euro on Thursday (http://www.marketwatch.com/story/dollar-rises-aims-for-its-first-monthly-gain-since-february-2017-08-31) dropped from an intraday high of $1.1907 to $1.1844 after the report, falling back to levels notched late Wednesday. Stocks across Europe pushed higher Thursday as the euro weakened.
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Miners lead: Equity gains overall on Thursday were led by a jump in shares of metals producers, which pushed the Stoxx Europe 600 Basic Resources Index up by 1.8%. Miners climbed after an official gauge of China's factory activity rose in August (http://www.marketwatch.com/story/chinas-official-manufacturing-pmi-beats-forecasts-2017-08-30). China is a key buyer of industrial and precious metals, making mining companies sensitive to developments in the world's second-largest economy.
Among top movers in the group, copper producer Antofagasta PLC (ANTO.LN) tacked on 3.4%, and Anglo American PLC (AAL.LN) bulked up 3%. Steel producer ArcelorMittal (MT) added 2.5%.
Stock movers: Food and drug retailers were under pressure as Carrefour (CA.FR) tumbled 15%. The supermarket chain cut its sales guidance for the year (http://www.marketwatch.com/story/carrefour-lowers-sales-out-look-after-profit-dips-2017-08-30) and flagged difficult trading conditions in some of its international markets. Carrefour also said the market was difficult in France because of strong competition.
Shares of Carrefour's French rival Casino Guichard-Perrachon S.A. (CO.FR) fell 4.4%. Royal Ahold Delhaize NV (AD.AE) lost 1.7% in Amsterdam trade and the U.K.'s Tesco PLC (TSCO.LN) gave up 1.3%.
Meanwhile, Arkema SA (AKE.FR) dropped 2.3% after two explosions rocked the French chemical maker's plant in Crosby, Texas (http://www.marketwatch.com/story/explosions-at-arkema-chemical-plant-hit-by-harvey-2017-08-31), because of flooding from Tropical Storm Harvey. Arkema said there was "no way to prevent" a potentially large explosion or fire at the facility which has been flooded with about six feet of water.
Economic docket: Inflation in the eurozone is expected to accelerate to 1.5% in August, according to a flash reading from Eurostat released (http://ec.europa.eu/eurostat/en/web/products-press-releases/-/2-31082017-BP) Thursday. That compares with a reading of 1.3% in July and a FactSet estimate of 1.4%. Core inflation was at 1.2% in August, meeting expectations.
Unemployment in the eurozone was at 9.1% in July, Eurostat said, unchanged from June and down from 10% in July 2016.
In Germany, jobless claims dropped 5,000 (http://www.marketwatch.com/story/german-jobless-claims-fall-as-demand-stays-high-2017-08-31) as expected in August and the unemployment rate stayed at a record low of 5.7%, the BA labor agency said Thursday.
U.K. consumer confidence edged up two points in August to -10, coming back from a reading of -12 in July that matched 2016's post-Brexit low, GfK said.
Indexes: Germany's DAX 30 index rose 0.6% to 12,076.86, and France's CAC 40 index added 0.7% to reach 5,091.94. In London, the FTSE 100 tacked on 0.8% to 7,420.45.
(END) Dow Jones Newswires
August 31, 2017 08:01 ET (12:01 GMT)