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Europe Markets: European stocks run into the red as Wall Street sets course for pullback

February 13
16:04 2018

European stocks fell Tuesday, as advances for mining and travel shares weren’t enough to guide the market toward a second consecutive win.

How markets are moving

The Stoxx Europe 600 index SXXP, -0.12%  shed 0.1% to 372.62, with the telecom and technology groups losing the most. But the basic materials and consumer services sectors were moving higher. On Monday, the benchmark climbed 1.2%, the first win in three sessions.

Germany’s DAX 30 index DAX, -0.17%  fell 0.3% to 12,245.82, and France’s CAC 40 index PX1, -0.21% slipped 0.1% to 5,132.10. The U.K.’s FTSE 100 UKX, -0.03% was up 0.2% to 7,191.24.

The euro EURUSD, +0.3498%  bought $ 1.2326, up from $ 1.2393 late Monday in New York.

What’s driving the market

The volatility that’s been shoving major stocks markets into correction territory was creeping back into the European markets, indicating that investors are still wrestling with concerns about rising inflation and higher bond yields.

U.S. stocks climbed Monday, but that was followed up in Asia with Japan’s Nikkei Average NIK, -0.65% falling while Hong Kong stocks HSI, +1.29%  surged 1.3%. Ahead of Wall Street’s open on Tuesday, U.S. stocks were pulling back, with Dow futures YMH8, -0.74%  dropping nearly 100 points.

But gains for metals prices such as copper HGH8, +0.99%  and gold GCJ8, +0.39%  helped lift up shares of European-listed mining companies. Metals prices denominated in dollars found strength on the back of a softening in the U.S. dollar DXY, -0.36%  .

What strategists are saying

“European markets are failing to follow through on yesterday’s bounce and a decent performance overnight in Asia,” said Neil Wilson, senior market analyst at ETX Capital, in a note. “A lack of volume yesterday on Wall Street suggests there is not a huge amount of interest in this recovery just yet and may be a signal that this is not a reversal in a secondary downtrend.”

Stock movers

TUI AG TUI, +5.83%  climbed 3% after the vacation services company posted a narrower net loss of 99.6 million euros ($ 112.7 million) for the first quarter and backed its full-year guidance

In the mining group, Anglo American PLC AAL, +2.00%  rose 1.4% and Glencore PLC  GLEN, +1.25% moved up 1%.

Kering SA shares KER, -1.39%  fell 1.2% even as the French parent of luxury goods maker Gucci posted net profit for 2017 that more than doubled from a year earlier, to 1.79 billion euros ($ 2.20 billion).

Economic data

In the U.K., a reading on January inflation showed annual inflation remained at 3% in January, compared with estimated reading of 2.9%. Inflation is well above the Bank of England’s target of 2%.

Read: A U.K. rate rise in May? Analysts digest hawkish surprise from BOE

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