Deutsche Bank shares fall despite doubling in profit
European stocks fell Thursday for the first time in seven sessions, with Deutsche Bank AG shares falling despite a leap in profit, as investors waited for a policy update from the European Central Bank.
The Stoxx Europe 600 fell 0.4% to 387.26. No sector traded higher, with oil and gas, consumer goods and utility shares logging the biggest losses. The index on Wednesday (http://www.marketwatch.com/story/european-stocks-struggle-to-hold-onto-20-month-high-ahead-of-trump-tax-unveiling-2017-04-26) rose 0.5%, ending at the highest level since August 2015.
The march of earnings reports continued Thursday. Deutsche Bank (DBK.XE) (DBK.XE) shares dropped 3% after the German lending heavyweight's profit doubled in the first quarter, but revenue came in roughly flat (http://www.marketwatch.com/story/deutsche-bank-profit-more-than-doubles-2017-04-27-24851353) when adjusted for the impact of credit spreads.
European stocks were lower following the unveiling of U.S. President Donald Trump's plan for tax cuts and changes (http://www.marketwatch.com/story/markets-got-what-was-broadly-expected-from-tax-plan-a-starting-point-2017-04-26), with some analysts saying the outline lacked detail. U.S. stocks shifted lower after the tax announcement.
Opinion:Trump's tax plan sets the stage for Dow 30,000, says Nigam Arora (http://www.marketwatch.com/story/trumps-tax-plan-sets-the-stage-for-dow-30000-2017-04-26)
ECB meeting: The European Central Bank is set to release its monetary policy statement, including any changes to interest rates and quantitative easing, later Thursday.
The central bank isn't expected to make major policy changes ahead of the final round of voting in the French presidential election, set for May 7. In addition, ECB President Mario Draghi has said there's yet to be evidence of a durable rise in eurozone inflation.
"Overall, we expect Draghi to remain restrained in this meeting, after all, the risks to inflation -- CPI dipped in March -- are still tilted to the downside and this could be one reason to delay tapering," said Kathleen Brooks, research director at City Index, in a note.
Read: French election relief lays ground for ECB tapering -- but not yet (http://www.marketwatch.com/story/french-election-relief-could-pave-way-for-ecb-tapering-but-not-yet-2017-04-25)
Troubles in the Italian banking sector may be another reason the ECB will hold off tapering, said Brooks.
"If the ECB reduces the amount of liquidity in the European financial system too quickly then it is hard to see how these banks can recapitalize themselves, and avoid selling off some of their bad debts at a book value so low that it hits their capital position," she said.
Ahead of the ECB statement, the euro bought $1.0906, on par with late Wednesday in New York. The bank's policy statement is due at 1:45 p.m. Frankfurt time, or 7:45 a.m. Eastern Time, followed by a news conference with Draghi at 2:30 p.m. Frankfurt time.
Stock movers: Deutsche Lufthansa AG (LHA.XE) shares were down 1.7% after the airline group swung to a first-quarter operating profit (http://www.marketwatch.com/story/lufthansa-swings-to-profit-as-sales-jump-2017-04-27) of 25 million euros ($27.3 million). The airline group earlier this month said ticket pricing was more positive on a currency adjusted basis.
Bayer AG (BAYN.XE) shares were up 3.1% after the German pharmaceuticals and chemicals maker reported a 38% jump in net profit (http://www.marketwatch.com/story/bayer-profit-up-38-on-plastics-lifts-outlook-2017-04-27) for the first quarter and raised its outlook for the full year.
WPP PLC shares (WPP.LN) fell 1.9% after the world's largest advertising company said revenue growth slowed in the first quarter as clients spent less in the U.S. and emerging markets (http://www.marketwatch.com/story/wpp-revenue-growth-lags-as-us-clients-spend-less-2017-04-27).
Individual indexes: Germany's DAX 30 fell 0.3% to 12,433.22. France's CAC 40 lost 0.4% at 5,266.59,
The U.K.'s FTSE 100 gave up 0.5% to 7,241.44.
(END) Dow Jones Newswires
April 27, 2017 04:33 ET (08:33 GMT)