Aveva shares soar after Schneider Electric agrees to take control
European stocks erased morning gains and ended mostly lower on Tuesday, as concerns about North Korea's thermonuclear-bomb testing spooked investors.
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The Stoxx Europe 600 index fell 0.1% to close at 373.71, after trading with a gain of as much as 0.5% at 375.89 earlier in the day.
The index on Monday fell 0.5%, (http://www.marketwatch.com/story/european-stocks-drop-after-north-korea-tests-its-nuclear-arsenal-2017-09-04) snapping a three-session winning streak, after North Korea conducted a nuclear bomb test and was said to be preparing for a possible launch (http://www.marketwatch.com/story/north-korea-is-getting-ready-for-another-possible-icbm-launch-says-south-korea-2017-09-04) of another intercontinental ballistic missile.
"Investors aren't in a major panic about the North Korean situation, but it is certainly on their minds. The fact the move higher today in [European stocks] couldn't be sustained for the session indicates it was mostly short covering that propped up the market," said David Madden, market analyst at CMC Markets U.K., in a note.
"The markets despise uncertainty, and while the Pyongyang problem is bubbling away in the background, we may see more of the same," he added.
Nikki Haley, the U.S. ambassador to the United Nations, said at a U.N. Security Council emergency meeting that Kim Jong Un was "begging for war." (http://www.marketwatch.com/story/nikki-haley-says-kim-jong-un-appears-to-be-begging-for-war-2017-09-04) Meanwhile, Russian President Vladimir Putin on Tuesday warned that ramped-up military pressure on North Korea could lead to "global, planetary catastrophe." (http://www.marketwatch.com/story/putin-warns-of-global-catastrophe-if-the-west-turns-up-the-heat-on-north-korea-2017-09-05)
See:Here's a win-win solution for the U.S. and China on North Korea (http://www.marketwatch.com/story/heres-a-win-win-solution-for-the-us-and-china-on-north-korea-2017-09-04)
Stock movers: Shares in Schneider Electric SE (SU.FR) added 0.3% after the French industrial group reached a deal to take control of British engineering software maker Aveva Group PLC (http://www.marketwatch.com/story/schneider-electric-takes-controling-stake-in-aveva-2017-09-05). Off the Stoxx 600, shares of Aveva Group PLC (AVV.LN) soared 26%.
Shares of Merck KGaA (MRK.XE)(MRK.XE) climbed 2.4% in Frankfurt after the German pharmaceutical company put its consumer-health business up for sale (http://www.marketwatch.com/story/merck-rises-2-after-health-business-is-put-up-for-sale-2017-09-05).
Away from the Stoxx 600, Cellectis SA (ALCLS.FR) tumbled 21% after the U.S. Food and Drug Administration ordered the French cell therapy specialist to put a cancer-drug trial on hold.
Economic data: The IHS Markit's gauge of services activity in the eurozone showed a decline in August. The services purchasing managers index came in at 54.7, slightly slower than the preliminary estimate of 54.9 and well below July's reading of 55.4. The composite output index at 55.7 was a touch slower than the 55.8 flash reading.
The composite PMI for the eurozone was unchanged (http://www.marketwatch.com/story/eurozone-economic-growth-to-slow-pmi-indicates-2017-09-05) at 55.7 in August. That was below the preliminary estimate of 55.8 and the average reading for the second quarter.
The prospect of a slowdown in eurozone economic activity may bolster the case for the European Central Bank to continue its bond-buying program after December. The ECB will release its latest policy decision on Thursday.
The euro initially fell after the data, but traded at $1.1911 at the European market close, up from $1.1897 late Monday in New York.
Indexes: Germany's DAX 30 index put on 0.2% to 12,123.71, but France's CAC 30 index fell 0.3% to 5,086.56.
In London, the FTSE 100 lost 0.5% to close at 7,372.92 (http://www.marketwatch.com/story/ftse-100-gains-traction-as-mining-shares-advance-2017-09-05).
(END) Dow Jones Newswires
September 05, 2017 11:58 ET (15:58 GMT)