Business

European stocks, euro retreat before weekend

European stock markets and the euro slid today on profit-taking heading into the weekend break, as investors took their leads from company updates and economic data.

London's benchmark FTSE 100 index lost 0.36% to stand at 6,811.86 points in afternoon trading.

Frankfurt's DAX 30 slipped 0.36% to 9,573.25 points and in Paris the CAC 40 shed 0.77% to 4,472.57 compared with Thursday's closing values.

"European markets continue to drag into the red after a string of disappointing corporate updates this morning," said trader Lee Mumford at SpreadEx.

European equities had risen yesterday after European Central Bank (ECB) president Mario Draghi hinted that policymakers were prepared to cut eurozone interest rates in June.

The same day, the euro hit a two-and-a-half-year peak near US$1.40 after the ECB held interest rates at a record low for the seventh straight month, but then dived on hints of more easing.

ECB chief Draghi gave a strong suggestion that the bank could ease monetary conditions in the euro area next month, saying the "governing council is comfortable with acting next time".

Analysts said Wall Street's poor showing on Thursday had also fed through into Europe's final trading day of the week.

"Yesterday the markets succeeded in powering higher, thanks to a fairly rosy interpretation of Mario Draghi's comments in the ECB press conference," said Chris Beauchamp, market analyst at IG traders.

"From the action last night on US markets, it is difficult to build a case for further gains from here."

In foreign exchange Friday, the euro dropped to US$1.3783 from US$1.3840 late in New York on Thursday.

The European single currency drifted up to 81.80 pence from 81.73 pence yesterday, while the British pound dropped to US$1.6848 from US$1.6931.

The price of gold climbed to US$1,289 an ounce on the London Bullion Market from US$1,287 on Thursday.

Overnight, French group Publicis and Omnicom of the United States said they had abandoned merger talks on what would have formed the world's largest advertising company.

Investors seemed to shrug off the news. Shares in Publicis initially rose on the news, but in afternoon trading they were down 0.5% at 60.40 euros in Paris. Omnicom shares rose 0.8% to US$66.75 in early trading in New York.

In London, International Airlines Group slid 3.7% to 389.7 pence despite the group revealing that it had significantly reduced its losses in the first quarter thanks to cost cutting at Spanish carrier Iberia and improved performance by British Airways. – AFP, May 9, 2014.

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