European car registrations decline
European stocks slipped Tuesday, with declines in automobile shares and a rise in the euro drawing Germany's benchmark slightly from its record high.
Continue Reading Below
The Stoxx Europe 600 index was down 0.1% at 395.43, with only the telecom, consumer goods and oil and gas sectors posting gains. The index on Monday ended up 0.1% (http://www.marketwatch.com/story/european-oil-mining-shares-bounce-up-outpacing-broader-market-2017-05-15), a second straight advance that kept the index around its highest since August 2015.
The pan-European index's recent gains have seen contributions from German and British blue-chips, with both the Germany DAX 30 and the U.K.'s FTSE 100 logging record closing highs on Monday.
"Markets seem to be enjoying the signs that incumbent governments are set for victory in upcoming elections," said Jasper Lawler, senior market analyst at London Capital Group, in a late Monday note.
German regional elections over the weekend appeared to bolster optimism for German Chancellor Angela Merkel's prospects for September's federal election. Meanwhile, U.K. Prime Minister "Theresa May is going for the jugular and markets like it," he said. "Investor cheer at a Conservative victory has gotten even louder since Labour's apparent plans for a 'Robin Hood tax' on financial transactions."
The FTSE 100 index (http://www.marketwatch.com/story/ftse-100-clings-onto-record-high-ahead-of-inflation-report-2017-05-16) on Tuesday rose 0.3% to 7,478, holding to gains even as inflation reached its highest since 2013 (http://www.marketwatch.com/story/uk-inflation-rate-at-fastest-since-2013-2017-05-16), at 2.7% in April, and the pound remained above $1.29.
"Since the snap election was announced, the negative correlation between the British pound and the FTSE 100 has broken down. If the last two weeks are any guide, investors in U.K. stocks seem to be looking beyond foreign exchange," said Lawler.
The DAX 30 on Tuesday tilted down 0.1% to 12,799, but the index remains in striking distance of logging a third straight closing high.
The export-oriented German equity market eased as the euro traded above $1.10 for the first time since May 5, buying $1.1035. That's up from $1.0975 late Monday in New York.
Read:Dollar slides to 6-month low as worries about Trump return (http://www.marketwatch.com/story/dollar-slides-to-6-month-low-as-worries-about-trump-return-2017-05-16)
In Paris, the CAC 40 fell 0.4% to 5,395.60
Movers: Auto shares struggled after European car registrations fell 6.6% in April, according to data from the European Automobile Manufacturers' Association out on Tuesday (http://www.acea.be/press-releases/article/passenger-car-registrations-4.7-four-months-into-2017-6.6-in-april). On the DAX, shares of Daimler AG (DAI.XE) lost 0.6%, BMW AG (BMW.XE) declined 0.5% and Volkswagen (VOW.XE) was fractionally lower. Auto parts manufacturer Continental AG (CON.XE) pulled back 0.8%.
BTG PLC (BTG.LN) dropped 7% after the drug maker posted a decline in yearly pretax profit to 31.6 million pounds (http://www.marketwatch.com/story/btg-profit-falls-even-as-use-of-varithena-rises-2017-05-16) ($40.8 million), but noted a steady increase in demand for its Varithena varicose vein treatment.
Topping the FTSE 100, Vodafone Group PLC shares (VOD.LN) (VOD.LN) climbed 3.8% after the telecom company forecast profit growth (http://www.marketwatch.com/story/vodafone-forecasts-stronger-profit-growth-2017-05-16-3485299) in the current year after hitting its organic growth target for fiscal 2017. Vodafone also raised its final dividend by 2% but posted an annual loss of 6.1 billion euros ($6.73 billion).
EasyJet PLC shares (EZJ.LN) dropped 5.7% after the budget carrier's six-month net loss widened to 192 million pounds (http://www.marketwatch.com/story/easyjet-loss-deepens-as-brexit-hit-pound-bites-2017-05-16) ($248 million). The airlines said weakness in sterling against the dollar and euro shaved GBP82 million off the bottom line.
Read:The ECB has 3 big reasons to wind up QE--here's why it shouldn't (http://www.marketwatch.com/story/the-ecb-should-avoid-the-temptation-to-cancel-qe-2017-05-10) (http://www.marketwatch.com/story/the-ecb-should-avoid-the-temptation-to-cancel-qe-2017-05-10)
Economic news: Eurozone economic growth expanded by 0.5% in the first quarter, according to the second estimate of gross domestic product from Eurostat. That was in line with forecasts and the flash estimate.
(END) Dow Jones Newswires
May 16, 2017 05:28 ET (09:28 GMT)