European Stocks End Roller Coaster Week With First Gain in Three
Frankfurt (Aug 29) After wild swings over the past few days, European stocks ended up posting their first weekly gain since China devalued its currency.
The Stoxx Europe 600 Index rose 0.3 percent at the close of trading, adding most of those gains in the final settlement period. An advance of 0.3 percent in the first few minutes of trading gave way to losses of as much as 1 percent as the session progressed, before the gauge moved higher.
The stocks index had daily moves of 1.7 percent or more in the past seven days as China’s currency devaluation rattled markets. Despite the volatility, the Stoxx 600 ended the week 0.6 percent higher.
“The market is just looking for some kind of guidance,” said Christian Zogg, who helps oversee about $10 billion at LLB Asset Management in Vaduz, Liechtenstein. “It’s always the same. A heavy loss and then try to figure out what’s really happening.”
Investors are waiting for cues on the timing of a U.S. rate increase from central bankers gathered at Jackson Hole, Wyoming this weekend, said Zogg. Traders’ odds of a rate increase in September has dropped to 38 percent, from about 48 percent before China’s move.
The Stoxx 600 plunged the most since 2008 on Monday. It then alternated between gains and losses until today’s first back-to-back advance in more than a week. Europe’s benchmark gauge is still heading for the worst month since 2011.
Money Out
Funds focused on the region also reflect the turn in sentiment. After holding on for 14 weeks, investors withdrew money from European equity funds for the first time in the period ended Aug. 26, a Bank of America Corp. report citing EPFR Global data showed. The $3.6 billion outflow was the most since October.
The Swiss Market Index slid 0.3 percent today as the franc rallied after data showed the nation unexpectedly avoided a recession in the second quarter. With its exporters particularly hit by concern over China’s economy, the benchmark gauge is heading for the worst month since 2009. Bears are paying the most since October to protect against further declines.
After dragging the Stoxx 600 down the past two weeks, energy companies posted the biggest advance among industry groups, with Seadrill Ltd. and Tullow Oil Plc rallying 9.2 percent or more.
Svenska Cellulosa AB climbed 4.4 percent after saying it will divide its assets into two standalone units, a move that could foreshadow a breakup of Europe’s largest private forest owner.
Italy’s FTSE MIB Index tumbled the most among western-European markets, dragged lower by a 5.6 percent decline in Salvatore Ferragamo SpA. The luxury shoemaker posted first-half revenue that missed estimates.
Adecco SA and Randstad Holding NV, the staffing firms that get about a fifth of their revenues from North America, lost at least 3.2 percent after a U.S. decision that more companies may be held responsible for labor-law violations committed by contractors.
Ingenico Group slipped 7.9 percent after the French payments-processing company was said to join bids to buy Worldpay Ltd.
Source: Bloomberg
