European Markets Finished Higher Despite Slow Start
(RTTNews) - The European markets got off to a weak start Wednesday, but staged a recovery in the morning that brought them back near the flat line. The markets then fluctuated between small gains and losses before firmly entering positive territory in the afternoon. The positive opening on Wall Street helped to push the European markets into the green.
Eurozone economic growth momentum is likely to be sustained in the first half of this year, driven by steady growth in private consumption and public spending, the group of three leading European economic institutes said Wednesday.
Gross domestic product appear to have increased by 0.4% in the fourth quarter of 2016 and is expected to keep growing at the same pace over the first half of this year, the group consisting of the Germany's Ifo, France's INSEE and Italy's ISTAT said in a statement.
Inflation was forecast to increase to 1.5 percent in the first and second quarters of this year from 0.7 percent in the final three months of 2016. Energy prices are expected to drive overall price growth. Core inflation was expected to keep growing at a similar pace over the forecast horizon at about 0.9 percent year-on-year.
The World Bank lowered its global growth projections as rising trade protection could have adverse effects after the U.S. President elect Donald Trump takes office this month.
According to the Global Economic Prospects report of the World Bank, the global economy will grow 2.7 percent this year instead of 2.8 percent projected in June last year. Going forward, growth was expected to be 2.9 percent each in 2018 and 2019.
Growth in the 19-nation euro area was expected to slow to 1.5 percent this year, before slowing slightly to 1.4 percent next year.
Uncertainty about the 'Brexit' process is expected to weigh on growth in the U.K. during 2017-18, the Washington-based lender said. However, the bank observed that the EU referendum had limited short-term cross-border financial market spillovers.
The pan-European Stoxx Europe 600 index advanced 0.29 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 0.03 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.29 percent.
The DAX of Germany climbed 0.54 percent and the CAC 40 of France rose 0.01 percent. The FTSE 100 of the U.K. gained 0.23 percent, but the SMI of Switzerland finished lower by 0.26 percent.
In Frankfurt, Volkswagen climbed 3.24 percent after the automaker confirmed it is closing in on a deal to settle a U.S. probe into the rigging of diesel-powered cars to cheat emissions tests.
Utility RWE jumped 3.34 percent and rival E.ON gained 5.09 percent. ThyssenKrupp advanced 3.27 percent and Salzgitter added 3.43 percent.
In Paris, Engie weakened by 2.98 percent after the French state revealed that it has sold a 4.1 percent stake in the company.
In London, supermarket giant J Sainsbury rose 1 percent after posting better-than-expected sales for the third quarter.
Engineering firm Cobham plunged 14.46 percent after its group trading profit for the year ended December 31 fell short of guidance.
Homebuilder Taylor Wimpey declined 1.22 percent despite saying it expects to deliver full year profitability at the upper end of market consensus.
Tullow Oil fell 1.86 percent after issuing a trading update for 2016.
TUI dropped 4.47 percent after Credit Suisse downgraded its rating on the stock to "Underperform" from "Outperform."
U.K. industrial production recovered at a faster than expected pace in November, data the Office for National Statistics revealed Wednesday. Industrial output climbed 2.1 percent in November from October, when production eased 1.1 percent. Output was expected to rise 1 percent.
The U.K. visible trade deficit widened more-than-expected in November, the Office for National Statistics reported Wednesday. The trade in goods showed a deficit of GBP 12.2 billion versus a shortfall of GBP 9.9 billion in October. Economists had expected the deficit to rise to GBP 11.5 billion.
U.K. construction output dropped unexpectedly in November, figures from the Office for National Statistics revealed Wednesday.
Construction output fell 0.2 percent in November from October largely due to a contraction in non-housing repair and maintenance. The monthly decline was followed by a 0.6 percent decrease in October and confounded the expected growth of 0.2 percent.