U.K. retail sales decline, but beat views
European stocks broke their longest losing run in a year on Thursday, with major regional indexes rebounding after well-received corporate updates. Investors also cheered a rise in shares of car makers after the release of encouraging EU sales figures.
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What are markets doing: The Stoxx Europe 600 index rose 0.8% to close at 384.93, snapping a seven-session streak of declines.
Germany's DAX 30 index added 0.6% to 13,047.22, while France's CAC 40 index gained 0.7% to 5,336.39. The U.K.'s FTSE 100 index ended 0.2% higher at 7,386.94.
The euro traded at $1.1777, down from $1.1791 late Wednesday in New York.
What is driving the markets: Traders put the recent selloff on pause as they assessed the latest round of corporate updates, which helped boost shares in the likes of Bouygues, British Land and 3i Group.
Auto maker stocks were also on the rise after data showed new car sales in the EU grew strongly (http://www.marketwatch.com/story/eu-new-car-registrations-return-to-growth-2017-11-16-24852759)in October, rebounding after a dip in September. The Stoxx Europe Automobiles & Parts Index climbed 0.8%.
Meanwhile, investors are monitoring the prospects for U.S. tax cuts out of Washington, with the House poised to pass its version of the tax-code rewrite (http://www.marketwatch.com/story/house-poised-to-pass-tax-bill-trump-tells-ucla-players-to-thank-chinas-xi-2017-11-16) Thursday afternoon.
But much work remains to be done. The Senate Finance Committee unveiled major changes to its tax legislation earlier in the week. The first Republican senator to come out against the tax plan emerged Wednesday. The House and any Senate version of the tax legislation will need to be reconciled.
Read:Stock market 'not even close' to pricing in tax cuts, says UBS (http://www.marketwatch.com/story/stock-market-not-even-close-to-pricing-in-tax-cuts-says-ubs-2017-11-15)
What are strategists saying: "After such a long run without any moves lower, equity markets were probably due a breather and this looks more like a technical correction before another assault higher, rather than the start of a more significant selloff," said Neil Wilson, senior market analyst at ETX Capital, in a note.
"Buying the dip still rules," he added.
However, not everyone was as optimistic.
"On a number of levels, major indices are starting to show signs of fatigue, with both the Nikkei 225 and the German DAX in particular looking quite vulnerable to further losses, with the DAX briefly trading below its October lows yesterday before rebounding," said Michael Hewson, chief market analyst at CMC Markets UK, in a note.
"With concerns about high yield credit prompting some profit-taking along with a recent survey that showed investors underweight in cash, it wouldn't take much more of a push for markets to fall even further as portfolio managers start to lock in profits as we head towards year-end," Hewson said.
Stock movers: Bouygues SA (EN.FR) climbed 5.2%. The French industrial conglomerate said its nine-month net profit more than doubled (http://www.marketwatch.com/story/bouygues-shares-rise-on-higher-profit-guidance-2017-11-16), buoyed by an increased contribution from its shareholding in Alstom SA (ALO.FR).
Shares of 3i Group PLC (III.LN) rose 2% after the international investment manager said it is on track to deliver another strong year of growth (http://www.marketwatch.com/story/3i-says-on-track-for-strong-year-of-growth-2017-11-16) in its private-equity portfolio.
British Land Co. PLC (BLND.LN) added 3.7% after the real-estate company said it swung to a first-half profit (http://www.marketwatch.com/story/british-land-swings-to-pretax-profit-2017-11-16).
Among car makers, Volkswagen AG (VOW.XE) (VOW.XE) rose 2.5%, Fiat Chrysler Automobiles NV (FCA.MI) (FCA.MI) climbed 1.8% and Renault SA (RNO.FR) gained 1.3%. In other Volkswagen news, the Germany company said it and its Chinese joint-venture partners will invest nearly $12 billion by 2025 in developing electric cars for the market in China.
Shares of GKN PLC (GKN.LN) slid 4.8% after the engineering group ousted its CEO designate Kevin Cummings amid problems at the aerospace unit he ran.
Sodexo SA (SW.FR) lost 1.8% after the French food service and facilities management company offered disappointing guidance.
Economic news: U.K. retail sales dropped 0.3% in October on the year, but still beat forecasts (http://www.marketwatch.com/story/uk-retail-sales-rebound-beats-expectations-2017-11-16) of a 0.5% decline, according to FactSet estimates. Month-on-month sales rose 0.3%, beating the 0.1% forecast.
The pound turned higher after the data to buy $1.3195, up from $1.3158 ahead of the report and $1.3170 late Wednesday in New York.
Eurozone inflation was confirmed at 1.4% in October, down from 1.5% in September.
(END) Dow Jones Newswires
November 16, 2017 12:17 ET (17:17 GMT)