2-1-18 9:42 AM EST | Email Article

By Sara Sjolin, MarketWatch

Euro moves back to trade around 3-year high

European stock gauges traded lower Thursday, falling for a fourth session in a row as global bond yields extended their recent climb.

What are markets doing?

The Stoxx Europe 600 index dropped 0.6% to 393.04, turning negative after a morning gain. It's adding to losses after closing Wednesday at an almost-four-week low (http://www.marketwatch.com/story/european-stocks-inch-higher-but-gains-kept-in-check-by-43-capita-plunge-2018-01-31).

Germany's DAX 30 index was down 1.6% to 12,978.48, while France's CAC 40 index shed 0.9% to reach 5,435.59. The U.K.'s FTSE 100 index lost 0.7% to 7,477.83 (http://www.marketwatch.com/story/ftse-100-gains-kept-in-check-by-pain-for-shell-vodafone-2018-02-01), weighed on by a decline for heavyweight Royal Dutch Shell PLC after earnings.

The euro rose to $1.2445 from $1.2414 late Wednesday in New York, trading around its highest level since December 2014.

The pound also continued to move higher, buying $1.4209 compared with $1.4191 on Wednesday. Sterling ended January with a 5% gain against the dollar, its biggest monthly rise since May 2009 (http://www.marketwatch.com/story/ebullient-pound-scores-its-best-month-since-2010-but-will-the-rally-last-2018-01-31).

What is driving the markets?

Global bond yields have been climbing in recent sessions, helping to pull some money away from stocks.

On Thursday, the yield on the 10-year U.S. Treasury note rose to 2.75% for the first time since mid-2014 (http://www.marketwatch.com/story/10-year-treasury-yield-hits-275-for-first-time-in-three-years-2018-02-01). Meanwhile, the yield on the 10-year German bond, known as the bund , was recently around 0.712% as it hovered around levels last seen in 2015.

The move comes after the Federal Reserve ended its two-day meeting Wednesday on an upbeat note, saying U.S. economic growth was solid. The U.S. central bank is seen as highly likely to raise interest rates next month (http://www.marketwatch.com/story/fed-takes-step-toward-rate-hike-as-baton-set-to-pass-to-powell-2018-01-31).

Which stocks look like key movers?

Shares of Dassault Systemes SE (DASTY) moved up 9% after the French software maker said fourth-quarter earnings jumped 41%.

Also in the tech arena, shares of Nokia Corp. (NOK) (NOK) rallied 10% after the Finnish telecom gear company posted earnings and revenue ahead of expectations.

NEX Group PLC (NXG.LN) surged 7% after reporting a 5% gain in third-quarter revenue. In its report, the financial technology firm said its markets had been "noticeably" more active in 2018 as volatility in foreign exchange markets rose from historic lows. NEX provides electronic trading platforms for banks, asset managers, hedge funds and companies.

3i Group PLC (III.LN) picked up 2% after the private equity and infrastructure investment company reported a 19.4% return on its assets (http://www.marketwatch.com/story/3i-total-return-at-194-in-last-9-months-of-2017-2018-02-01) for the nine months to Dec. 31.

On the downside, shares of TDC A/S (TDC.KO) were slammed 7% lower after the Danish telecom operator offered to buy Modern Times Group's (MTG-B.SK) broadcasting and entertainment business for $2.5 billion.

Novo Nordisk A/S (NOVO-B.KO) (NOVO-B.KO) lost 5% after the insulin maker issued a profit warning due to a foreign-exchange hit (http://www.marketwatch.com/story/novo-nordisk-warns-on-profit-due-to-forex-hit-2018-02-01).

Shares of Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) fell 2% as investors worried about the oil giant's weak cash flows (http://www.marketwatch.com/story/shell-profit-triples-but-cash-flow-disappoints-2018-02-01) in the fourth quarter. Its earnings tripled in 2017 after what the company described as "a year of transformation," which was also helped by a 18% rally in Brent oil prices .

Daimler AG (DAI.XE) lost 3% after the car maker posted a 49% jump in fourth-quarter profit, but also issued a cautious outlook for 2018 (http://www.marketwatch.com/story/daimler-cautious-on-2018-even-after-profit-soars-2018-02-01).

Which economic reports are out?

The eurozone manufacturing PMI was confirmed at 59.6 in January, in line with the flash reading and down from 60.6 in December. The standout was Italy, whose reading jumped to its highest level since February 2011 at 59. A level above 50 signals expansion.

In the U.K., however, the manufacturing PMI fell to 55.3 from 56.2 in December, missing analyst forecasts.

Check out:Ebullient pound scores its best month since 2009 -- but will the rally last? (http://www.marketwatch.com/story/ebullient-pound-scores-its-best-month-since-2010-but-will-the-rally-last-2018-01-31)

 

(END) Dow Jones Newswires

February 01, 2018 09:42 ET (14:42 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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