Thyssenkrupp shares rises on Tata deal news; Spain shares under pressure
European stocks wavered Wednesday, with investors seeming to hold off before the U.S. Federal Reserve's policy update, even as they assessed deal news from Thyssenkrupp and other corporate reports.
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The Stoxx Europe 600 index ended down 0.04% at 381.98, echoing quiet action seen in the U.S (http://www.marketwatch.com/story/us-stock-futures-in-holding-pattern-as-historic-fed-decision-looms-2017-09-20).
Most major European indexes were little changed before the highly anticipated release of the Fed's policy statement (http://www.marketwatch.com/story/hey-fed-boss-janet-yellen-inflation-is-still-low-and-stocks-are-soaring-what-say-you-2017-09-18) and the news conference by Fed Chairwoman Janet Yellen. Germany's DAX 30 index France's CAC 40 index both ticked up by 0.1%. The U.K.'s FTSE 100 ended fractionally lower (http://www.marketwatch.com/story/ftse-100-edges-up-as-fed-decision-takes-center-stage-2017-09-20).
But Spain's IBEX 35 lost the most, ending down 0.8%, following news that police in Spain arrested some Catalonian officials (http://www.marketwatch.com/story/catalan-officials-arrested-in-spain-ahead-of-banned-independence-vote-2017-09-20) for their alleged involvement in planning a vote on Catalonia's secession from Spain. That ballot is set for Oct. 1, and has been declared illegal by the Spanish government.
The U.S. central bank is widely expected to keep interest rates on hold but to start unwinding its $4.5 trillion balance sheet (http://www.marketwatch.com/story/feds-balance-sheet-unwind-will-be-moment-of-truth-for-financial-markets-2017-09-18). Analysts said the statement may be followed by moves in several asset classes, such as stocks, currencies and gold.
"Any caution on the economic outlook is likely to push out the prospect that we could see another rate rise this year, and we shouldn't forget that the problem of the [U.S.] debt ceiling has been pushed out into December," said Michael Hewson, chief market analyst at CMC Markets UK.
"If that remains unresolved by the time of the December meeting, then it makes the prospect of a rate move even less likely," he said in a note.
The euro bought $1.1997, slightly up from $1.1994 late Tuesday in New York. But the euro has climbed about 14% against the greenback this year.
"Depending on the post-Fed [dollar]-appetite, the [euro-dollar] could return to its 200-[day] moving average (1.1962), or pursue its short-term positive trend," said LGC senior market analyst Ipek Ozkardeskaya.
The Fed policy decision is due at 7 p.m. London time, or 2 p.m Eastern Time. Yellen's press conference is set to start at 2:30 p.m. Eastern Time.
Stock movers: Thyssenkrupp AG (TKA.XE) shares climbed 2.4% after the company said it and Tata Steel Ltd. (500470.BY) will combine their European steel operations (http://www.marketwatch.com/story/thyssenkrupp-tata-seal-european-steel-deal-2017-09-20). The new company would be the second-largest steel producer in Europe after ArcelorMittal (MT). ArcelorMittal shares rose 1.6%.
Fortum Oyj (FORTUM.HE) leapt 4.2%, as the Finnish utility is in advanced talks over a 3.76 billion euro ($4.51 billion) bid for E.ON SE's (EONGY)stake in Germany-based energy company Uniper SE (http://www.marketwatch.com/story/fortum-in-talks-on-45-billion-uniper-stake-bid-2017-09-20)(UN01.XE). E.On shares rose 2.8% and Uniper shares climbed 5.9%.
Kingfisher PLC (KGF.LN) shares popped up 5.6%. The home improvement retailer said it's on track to meet targets in the second year of its five-year restructuring plan, as it raised its dividend. But Kingfisher's first-half profit fell 6% (http://www.marketwatch.com/story/kingfisher-pretax-profit-hurt-by-weak-french-sales-2017-09-20), and it stayed cautious in its outlook for its core U.K. and French markets.
Shares of Inditex SA (ITX.MC) fell 0.8% after the Spanish retailer's Zara chain had a bigger-than-expected decline in profitability (http://www.marketwatch.com/story/zara-parent-inditex-profit-up-but-margin-falls-2017-09-20), triggered in part by currency fluctuations. Overall, the autumn and winter sales season got off to a more robust start than expected, the company said.
Deutsche Telekom AG shares (DTEGY) ended up 0.8%, extending gains logged Tuesday. Those moves followed a CNBC report that Sprint Corp. (S) is in talks to merge with Deutsche Telekom's T-Mobile US Inc. (TMUS) unit.
Data: The U.K.'s Office for National Statistics said retail sales rose by a faster-than-expected rate of 1% in August (http://www.marketwatch.com/story/uk-retail-sales-rise-faster-than-expected-2017-09-20). That sending the pound on a brief rally above $1.3600, visiting levels not since June 2016, just after the Brexit referendum.
Read:Don't call the German election boring--it could be huge leap or setback for the eurozone (http://www.marketwatch.com/story/dont-call-the-german-election-boring-it-could-mean-a-huge-shift-for-the-eurozone-2017-09-18)
(http://www.marketwatch.com/story/dont-call-the-german-election-boring-it-could-mean-a-huge-shift-for-the-eurozone-2017-09-18)Also read:German election: Who's Merkel up against and what are their chances? (http://www.marketwatch.com/story/german-election-whos-merkel-up-against-and-how-could-they-shape-the-new-government-2017-08-31)
(END) Dow Jones Newswires
September 20, 2017 12:18 ET (16:18 GMT)