French consumer confidence at 10-year high
European stocks dropped Wednesday, pulled down by a rising euro, which looked headed for its highest level in a year on worries the European Central Bank may start winding down monetary stimulus.
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The Stoxx Europe 600 gave up 0.8% to 382.84, on track for its lowest close since April 21, FactSet data showed. All sectors fell, with tech, utilities and basic materials losing the most.
Stocks on the pan-European benchmark were keying off losses for the major U.S. indexes on Tuesday (http://www.marketwatch.com/story/wall-street-stocks-on-track-to-slip-hurt-again-by-a-drop-for-techs-2017-06-27). Those moves came as declines for technology shares deepened and after Senate Republicans delayed a vote on health care legislation, casting doubt on the Trump administration's ability to deliver on its pro-growth program.
See:Invest in these European underperformers now before Daniel Loeb does (http://www.marketwatch.com/story/invest-in-these-european-underperformers-now-before-daniel-loeb-does-2017-06-28)
A leap in the euro against the dollar was also putting pressure on stocks, as a stronger euro can cut into sales of goods made by European exporters to overseas clients.
The shared currency traded at $1.1370, rising toward $1.1400, where it hasn't traded since early June 2016. It changed hands at $1.1340 late Tuesday in New York.
The euro started its upswing from $1.12 on Tuesday after ECB President Mario Draghi said in a speech that "a considerable degree" of stimulus is needed in the eurozone, a step back from the more dovish language used in earlier speeches.
Read:ECB's Draghi hints at winding down eurozone QE (http://www.marketwatch.com/story/ecbs-draghi-hints-at-winding-down-of-eurozone-qe-2017-06-27)
"Draghi stole the show ... when he said they may change policy to keep stance unchanged," said Kathy Lien, BK Asset Management's managing director of FX strategy.
"In other words, he's suggesting that the ECB could soon move from their current accommodative stance to a neutral one," she said in a note late Tuesday.
In light of positive eurozone data, few can question Draghi's optimism and for this reason, the move in the euro could extend as high as $1.15, Lien said.
Indexes: In Frankfurt, the export-heavy DAX 30 lost 0.8% at 12,566.96. In London, the FTSE 100 pulled back 0.5% to 7,494.65, while France's CAC 40 index flopped down 0.8% to 5,218.48.
Stock movers: ABN Amro Group NV (ABN.AE) fell 2.3% after the Dutch government cut its stake in the bank to 63% from 70%.
Royal Philips NV (PHG) lost 1.6% after the Dutch health-technology company said it is buying Spectranetics Corp. (SPNC)for 1.9 billion euros ($2.15 billion). (http://www.marketwatch.com/story/royal-philips-to-buy-spectranetics-for-215-bln-2017-06-28)
Bunzl PLC shares (BZLFY) climbed 4.1% after the distribution and outsourcing group said revenue for the first half of the year increased by 7% (http://www.marketwatch.com/story/bunzl-revenue-rises-7-buys-3-more-businesses-2017-06-28) and that it's bought three businesses as part of its growth strategy.
Economic docket: Investors on Wednesday received upbeat data from France, where consumer confidence hit its highest since June 2007 (http://www.marketwatch.com/story/french-consumer-confidence-at-highest-in-10-years-2017-06-28), said statistics agency Insee.
(END) Dow Jones Newswires
June 28, 2017 05:00 ET (09:00 GMT)