Contributed by: DailyFx
Europe Session Key Developments
* Investors Still Uncertain About Quantitative Easing
* US GDP Meets Expectations
European Stocks Closed Mixed as Investors Question Potential QE Success
European Markets closed mixed at the end of the trading week as the Stoxx Europe 600 experienced its first October rally in three years. The benchmark gauge added 0.1 percent at the end of the day, but closed down 0.2 percent for the week. However, the index has risen 2.5 percent this month amid speculation of further quantitative easing by the Federal Reserve. Many investors feel that potential QE success has already been priced into the market and that there are still some question marks as to whether it will work. Also, the US economy grew at a 2 percent annual rate in the third quarter as consumer spending climbed the most in almost four years. The increase in GDP was in line with analysts’ expectations. Overall, national benchmark indexes fell in 11 of the 18 western European markets.
FTSE 100 / 5,675.16 / -2.73 / -0.02%
The FTSE 100 declined at the end of the trading session on Friday. The benchmark index fluctuated between gains and losses for much of the day as investors speculated whether the US Federal Reserve will next week announce sufficient measures to keep the recovery on track. Scottish & Southern Electricity Plc climbed 3 percent as the company announced it will increase natural gas prices. British Airways fell 3.1 percent even as the company reported earnings that topped analysts’ estimates.
CAC 40 / 3,833.50 / -1.34 / -0.03%
The French benchmark gauge fluctuated between gains and losses throughout the day. BNP Paribas SA ended two days of gains, losing 1 percent as banking stocks were among the worst performers in Europe today. Greece’s Piraeus Bank SA sank 6.4 percent after the company announced plans to raise 800 million Euros in a sale of new shares to boost its capital. Bollore advanced for a second day, rising 1.6 percent as the company posted a 27 percent increase in third quarter sales. Eutelsat Communications sank 4 percent after it reported the loss of a satellite because of “an anomaly” detected on the propulsion subsystem.
DAX / 6,601.37/ +6.09 / +0.09%
The German index experienced the biggest monthly gain since March, as investors attempted to gauge the impact of further stimulus by the Federal Reserve. Metro, Germany’s largest retailer, tumbled 1.5 percent as HSBC Holdings Plc cut its recommendation on the stock to “neutral” from “overweight.” Porsche preferred shares fell 1 percent after the carmaker had its rating reduced to “neutral” from “buy” at UBS AG. MorphoSys slumped 2.3 percent. The biotechnology company reported a decline in third quarter net income to 1.4 million Euros, from 2.6 million Euros in the year earlier. Bilfinger Berger SE slid 3.2 percent as the company appointed former Hesse state premier Roland Koch as CEO.
IBEX 35 / 10,812.90 / +59.40 / +0.55%
The Madrid benchmark index experienced the largest gain among the 5 major benchmark indexes. Banco Popular Esponol SA climbed 1.6 percent after the Spanish lender announced third quarter profit fell. Ferrovial SA gained 3.3 percent as the manager of airports and highways posted a nin-month profit of 315 million Euros. Gamesa Corporacion Tecnologica SA rose for a seond day, gaining 2.2 percent. Gestevision Telecinco SA rose for a second day as Iberdrola SA further increased its stake in the company.
S&P/MIB / 22,048.43/ -39.29 / -0.18%
The Italian index declined for the fourth straight day this week. Amplifon SpA managed to climb 0.5 percent as the Cheuvreux trimmed its price estimate on the world’s largest hearing-aid distributor to 4.7 Euros from 4.8 Euros. It reiterated an “outperform” rating. Intesa Sanpaolo SpA dropped 2.3 percent ast he company is a likely candidate to buy the assets of Polbank, the Polish unit of Greece’s EFG Eurobank. Credit Suisse Group AG trimmed its estimates on Italian banks before quarterly resorts, causing further decline in the banking sector of the Italian economy.