EUROPE MARKETS: European Stocks Rally, But Log Third Monthly Loss In A Row
Euro drops below $1.19; Eurozone inflation rises in August
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 close at 373.88, adding to a 0.7% gain from Wednesday, when fears of a military conflict between the U.S. and North Korea eased and enlivened buying appetite.
"Make no mistake, the standoff between Pyongyang and Washington DC is still ongoing, but while tempers are somewhat at a standstill, the bullish sentiment will continue. Traders are using the halt in hostilities as an opportunity to pick up stocks, but how long will the buying momentum last?," said David Madden, market analyst at CMC Markets U.K., in a note.
Wednesday's and Thursday's rallies, however, weren't enough to pull the pan-European benchmark into positive for the month. The Stoxx 600 ended with a 1.1% decline for August, marking its third straight monthly decline.
Read:5 charts show there was no summer lull on Wall Street in August (http://www.marketwatch.com/story/5-charts-show-there-was-no-summer-lull-on-wall-street-in-august-2017-08-31)
Stocks have been hurt in part by strength in the euro , which recently hit a more than two-year high at around $1.20 against the U.S. dollar and a roughly eight-year high against the pound .
Euro strength is a worry for more 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 $1.1823 after the report, falling back to levels not seen since last Friday. Stocks across Europe pushed higher Thursday as the euro weakened.
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 1.2%. 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 2%, Anglo American PLC (AAL.LN) bulked up 2.8% and Rio Tinto PLC (RIO)(RIO) (RIO) gained 1.8%.
Stock movers: Food and drug retailers were under pressure as Carrefour (CA.FR) tumbled 13% for its biggest loss ever. 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 SA. (CO.FR) fell 2.8%. Royal Ahold Delhaize NV (AD.AE) lost 1.2% in Amsterdam trade and the U.K.'s Tesco PLC (TSCO.LN)gave up 0.8%.
Meanwhile, Arkema SA (AKE.FR) dropped 1.9% 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 6 feet of water.
Economic docket: Inflation in the eurozone is expected to have accelerated 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 negative 10, coming back from a reading of negative 12 in July that matched 2016's post-Brexit low, GfK said.
Indexes: Germany's DAX 30 index rose 0.4% to end at 12,055.84, and France's CAC 40 index added 0.6% to reach 5,085.59. In London, the FTSE 100 tacked on 0.9% to 7,430.62 (http://www.marketwatch.com/story/ftse-100-builds-on-gains-as-miners-get-china-boost-2017-08-31).
(END) Dow Jones Newswires
August 31, 2017 12:13 ET (16:13 GMT)