AstraZeneca drops following report CEO is departing
European stocks largely stepped higher Thursday, building on the prior day's sizable jump that was sparked by dovish comments from U.S. Federal Reserve chief Janet Yellen.
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The Stoxx Europe 600 rose 0.3% to close at 386.14, after the index on Wednesday (http://www.marketwatch.com/story/european-stocks-rise-lifted-by-oil-firms-and-burberry-2017-07-12)notched its biggest one-day percentage advance since April 24, tacking on 1.5%. Global equity benchmarks have been given a midweek shot in the arm by Yellen saying interest rates don't have to rise all that much further.
But the region's main equity benchmark was kept in check by a sharp drop for AstraZeneca PLC's shares (AZN.LN) (AZN.LN) . The drugmaker fell 3.5% for the Stoxx 600's biggest drop in the wake of reports that CEO Pascal Soriot is expected to take the top job (http://www.reuters.com/article/us-teva-pharm-ind-astrazeneca-ceo-idUSKBN19X2OB?il=0) at Israel-based Teva Pharmaceuticals Industries Ltd. (TEVA) .
Also on the downside, Daimler AG (DAI.XE) gave up 0.5% following reports the German auto maker might face an emissions scandal. A German media research consortium has said the maker of Mercedes-Benz cars had for almost a decade cheated on emissions tests on two of its lines of engines, a Deutsche Welle report said (http://www.dw.com/en/german-carmaker-daimler-facing-its-own-dieselgate-emissions-scandal/a-39664497).
On the upside, Telecom Italia SpA (TIT.MI) rose 2.7%. S&P raised its outlook on the telecom's credit rating to positive Wednesday, citing the successful execution of an efficiencies plan, a Dow Jones Newswires report said. But UniCredit analyst Stephan Haber is unconvinced, saying it "does not make sense" to assign a positive outlook before additional details are known about French telecom Iliad SA's (ILD.FR) entry to the Italian telecom market, the report added.
National indexes: Germany's DAX 30 index closed up 0.1% at 12,641.33, while France's CAC 40 index climbed 0.3% to 5,235.40. But the U.K.'s FTSE 100 index slipped 0.1% to 7,413.44 (http://www.marketwatch.com/story/ftse-100-slips-as-astrazeneca-slides-2017-07-13).
"While a less hawkish testimony from Fed Chair Yellen gave markets a boost yesterday, by inspiring hope of cheaper money for longer, [dollar] weakness since has offered mixed blessings," Mike van Dulken, head of research at Accendo Markets, said in a note.
For example, the weaker dollar against the pound is "weighing on London-listed stocks with an international reliance. However, remember also that a weaker USD also represents a benefit for the key commodity space, namely oil and miners," van Dulken added.
The pound also got a boost from hawkish comments from Bank of England policy maker Ian McCafferty who called for an early end to the central bank's quantitative easing program.
Read:Yellen says not many more rate hikes needed (http://blogs.marketwatch.com/capitolreport/2017/07/12/live-blog-and-video-of-yellens-testimony-before-house-panel/)
And see:Reacting to Yellen, traders may get to right place for wrong reason (http://www.marketwatch.com/story/reacting-to-yellen-traders-may-get-to-right-place-for-wrong-reason-2017-07-12)
Sterling traded at $1.2925, up from $1.2884 late Wednesday in New York.
Yellen was also testifying before the Senate Banking Committee on Thursday and was still speaking at the time of the European close.
Economic docket: German inflation for June was confirmed at 1.5%, up from 1.4% in May. However, inflation in France dipped to 0.8% last month, compared with 0.9% in May.
(END) Dow Jones Newswires
July 13, 2017 12:42 ET (16:42 GMT)