European stocks drop as Syria tensions keep traders on edge

European stocks fell for a second straight session on Thursday, with concerns over a potential military conflict in Syria keeping investors from making any big bets on the equity markets.

Minutes from the European Central Bank’s March meeting will also be in focus, with traders watching for any hints on the future of the bank’s ultraloose monetary policy.

What are markets doing?

The Stoxx Europe 600 index

SXXP, +0.21%

 dropped 0.1% to 375.65, adding to a 0.6% loss from Wednesday.

Germany’s DAX 30 index

DAX, +0.41%

 fell 0.2% to 12,274.05, while France’s CAC 40

PX1, +0.26%

 gave up 0.2% to 5,267.45. The U.K.’s FTSE 100 index

UKX, +0.08%

 slipped 0.1% to 7,249.41.

The euro

EURUSD, -0.3072%

 fell to $1.2359 from $1.2369 late Wednesday in New York, while the pound

GBPUSD, -0.0071%

 was slightly lower at $1.4171 compared with $1.4178 on Wednesday.

What is driving the market?

Geopolitical concerns continued to weigh on investors’s minds, after U.S. President Donald Trump on Wednesday signaled a missile attack on Syria was not far off. The possibility of a U.S. strike against Syrian President Bashar al-Assad has been growing since a suspected government-sanctioned chemical-weapons attack killed civilians in Damascus over the weekend. Russia has warned the U.S. not to launch an attack, saying it’ll shoot down any missiles.

Traders also assessed minutes from the Fed’s March meeting that came out after European markets closed on Wednesday. The minutes showed the rate-setters expect U.S. economic growth and inflation to continue to accelerate, underlining the need for tighter policy.

In Europe, the ECB will be in the limelight on Thursday when it releases its minutes from the March meeting at 12:30 p.m. London time, or 7:30 a.m. Eastern Time. Analysts said focus will be on any clues that the ECB will wind down its aggressive quantitative-easing program this year, with any hawkish hints expected to send the euro higher.

What are strategists saying?

“Global equity markets are likely to remain firmly gripped by geopolitical risk, as escalating tensions over the conflict in Syria weigh heavily on sentiment,” said Lukman Otunuga, research analyst at FXTM, in a note.

“With hawkish statements from the Federal Reserve and heightened political uncertainty around the U.S. and Russia standoff leaving investors on edge, Wall Street could extend its losses. Global equity bears are likely to remain in the vicinity as the terrible combination of geopolitical tensions and overall market anxiety sour appetite for riskier assets,” he added.

Which stocks are in focus?

Playtech PLC

PTEC, +5.54%

 jumped 8.4% after the gambling-software company said it’ll buy Italian SNAITech SpA

SNA, +14.85%

 for 846 million euros ($1.05 billion).

Man Group PLC

EMG, +7.75%

 gained 6.7% after the U.K. asset manager said funds under management rose in the first quarter and that it plans to repurchase up to $100 million of its own shares.

Royal DSM NV

DSM, +5.41%

 added 5.3% after the Dutch health, nutrition and materials group raised its full-year outlook.

Carrefour SA

CA, -4.73%

 dropped 5.2%. The French supermarket chain said late Wednesday sales dropped in the first quarter of 2018 due to less-favorable markets in Europe.

Sodexo SA

SW, -1.53%

 fell 1.4% after backing its guidance for the full year, which it had reduced in late March after its second-quarter performance was below expectations.

GEA Group AG

G1A, -7.09%

 slid 7% after the equipment provider said first-quarter operating profit will be lower than last year.

Outside the Stoxx 600, shares of Sulzer AG

SUN, +9.65%

 rallied 14% after the Swiss engineering company confirmed it no longer faces the possibility of U.S. sanctions and that it is free to conduct business globally.

Carpetright PLC

CPR, -12.51%

 tanked 17% after the retailer said it’ll close at least 92 stores to raise around £60 million as part of a “fundamental restructuring.”

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *