Europe Stocks slide, but log Best Quarter in Years
European stock markets moved firmly lower on Tuesday, with investors pegging the slide to traders using disappointing eurozone unemployment data as an excuse to bank gains after the best quarter in years.
“We’ve had a good run in Europe, so we’re seeing some book squaring after a good quarter,” said Michael Hewson, chief market analyst at CMC Markets. “Investors are using the unemployment data as en excuse to take profits.”
After a volatile trading day, the Stoxx Europe 600 index SXXP, -0.64% dropped 0.6% to close at 397.30. The index traded as high as 401.75 earlier in the day, but started to pare gains after the arrival of a mixed bag of eurozone economic reports.
The eurozone inflation rate improved in March to negative 0.1% from negative 0.3% the previous month, easing fears of deflation in the currency union. But eurozone unemployment for February came in at 11.3%, higher than the forecast of 11.2%.
January’s joblessness rate was raised to 11.4%, from 11.2%.
For the quarter, the pan-European benchmark jumped 16%, marking its best quarterly gain since the 17.8% rally logged in the third quarter of 2009.
Other markets: Germany’s DAX 30 index DAX, -0.99% fell 1% to 11,966.17 on Tuesday, shaking off an earlier boost it got from German labor data. That report showed unemployment dropped to a record low of 6.4% in March, down from 6.5% in February.
For the quarter, the benchmark scored a 22% rise, the strongest quarterly gain since the second quarter of 2003.
France’s CAC 40 index PX1, -0.98% erased 1% to 5,033.64, trimming its quarterly advance to 17.8%.
The U.K.’s FTSE 100 index UKX, -1.72% tanked 1.7% to 6,773.04 ahead of the May 7 general election. Read: FTSE drops but stays on track for best quarter in more than a year
Data: France reported that consumer spending for February rose 0.1% on the month and 3% on the year, bang in line with forecasts by economists polled by The Wall Street Journal.
The U.K. economy grew at a faster-than-expected pace in 2014, confirming that the country was the top growth performer in the Western world last year. Gross domestic product for the full year was raised to 2.8%, from 2.6% reported previously.
Greece reform impasse: The antiausterity government in Athens and Greece’s international lenders were still struggling to reach a reform agreement, which is needed to unlock the next tranche of bailout funds for the struggling country. Reuters reported that the negotiations between the two sides ended on Tuesday without a deal on revised reforms, while European Council President Donald Tusk warned it could take until the end of April before a deal is brokered.
Greek Prime Minister Alexis Tsipras told Greece’s parliament late Monday they wouldn’t give in unconditionally to the economic overhauls demanded by its creditors. Greece is at risk of running out of cash in April unless it receives fresh funding.
Movers: Shares of Kingfisher PLC KGF, +4.33% jumped 4.3% after the do-it-yourself retailer said it would close about 60 stores in its U.K. chain B&Q and its “few loss-making stores” in Europe.
Raiffeisen Bank International AG RBI, +5.85% climbed 5.9% after J.P. Morgan Cazenove lifted the Austrian lender to overweight from neutral.
Source: MarketWatch
