ZEW's German economic sentiment at 10-month low; Provident Financial shares crash
European stocks pushed higher Tuesday, with advances in the basic resources sector poised to lead the market out of a three-session run of declines.
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The Stoxx Europe 600 index bulked up by 0.7% to 374.44. All sectors rose, led by the basic materials and health care groups. The pan-European benchmark fell 0.4% on Monday (http://www.marketwatch.com/story/fiat-maersk-shares-shine-in-lackluster-european-stock-market-2017-08-21), in part on concerns about another flare-up in tensions between the U.S. and North Korea.
But investors on Tuesday appeared to set aside those concerns and concentrate on corporate financial updates. Among these were updates from mining heavyweights BHP Billiton PLC and Antofagasta PLC.
BHP shares (BLT.LN) (BHP.AU) (BHP.AU) moved up 3% after the miner said it's planning to sell its onshore U.S. oil and gas operations (http://www.marketwatch.com/story/bhp-billiton-looks-to-sell-us-shale-operations-2017-08-21). The decision followed a push by activist investor Elliott Management in favor of the move.
BHP also said its final dividend will rise threefold. The miner swung to a yearly net profit of $5.86 billion, but that was weaker than anticipated.
Antofagasta shares (ANTO.LN) jumped 2.9%. The copper miner more than tripled its interim dividend payment (http://www.marketwatch.com/story/antofagasta-profit-surges-to-triple-dividend-2017-08-22) after reporting a sharp rise in half-year earnings.
The share-price moves helped guide the Stoxx Europe 600 Basic Resources Index higher by 1.5%, on course for its best session in nearly a week.
Gloom in Germany: European stocks held to higher ground even after the release of a downbeat ZEW survey on German economic sentiment (http://www.marketwatch.com/story/german-economic-sentiment-drops-more-than-seen-2017-08-22). The economic expectations index came in at 10.0, down from 17.5 in July and below the FactSet estimate of 15.0. That's the lowest reading since October when the index was 6.2.
"The significant decrease of the ZEW economic sentiment indicator reflects the high degree of nervousness over the future path of growth in Germany. Both weaker than expected German exports as well as the widening scandal in the German automobile sector in particular have helped contribute to this situation," ZEW President Achim Wambach said in a statement.
"Overall, the economic outlook still remains relatively stable at a fairly high level," he said.
The euro drifted down to $1.1747, from around $1.1771 ahead of the survey's release. The shared currency bought $1.1817 late Monday in New York.
The ZEW survey arrived ahead of data due this week on German manufacturing and services activity in August and the final look at second-quarter gross domestic product. On Friday, the widely watched business climate survey from the Ifo Institute is due. Last month, Ifo said sentiment among German business sentiment was 'euphoric' and businesses were optimistic about their short-term prospects.
Read:Why export powerhouse Germany is 'euphoric' even with a soaring euro (http://www.marketwatch.com/story/export-reliant-germany-euphoric-even-as-the-euro-soars-yes-heres-why-2017-08-09)
Also: German growth robust despite mild slowdown in Q2 (http://www.marketwatch.com/story/german-growth-robust-despite-mild-slowdown-in-q2-2017-08-15)
Stock movers: Provident Financial (PFG.LN) tumbled 73% after the U.K.-based lender said it expects to lose between 80 million pounds and GBP120 million in the third quarter. The profit warning (http://www.marketwatch.com/story/provident-warns-on-profit-again-ceo-to-leave-2017-08-22), the second in three months, comes after Provident shifted to using full-time "customer experience managers" rather than self-employed agents in its home credit business.
National indexes: Germany's DAX 30 index moved up 0.7% to 12,143.96, and France's CAC 40 index rose 0.4% to 5,109.28,
The U.K.'s FTSE 100 index gained 0.6% to 7,364.87 (http://www.marketwatch.com/story/ftse-100-led-higher-by-miners-as-provident-plunges-almost-60-2017-08-22).
(END) Dow Jones Newswires
August 22, 2017 06:58 ET (10:58 GMT)