Top Stories
European shares slip as Belgium’s argenx slides; Telefonica lifts telecoms
Global Banking & Finance Review®
Company
By Ankika Biswas and Khushi Singh
(Reuters) -Europe’s benchmark stock index erased early gains on Wednesday, dragged by a slide in Belgian pharmaceutical company argenx, even as the telecom sector got a boost from Telefonica shares after the Spanish government unveiled plans to buy a stake.
The pan-European STOXX 600 was down 0.2% by 0923 GMT, after gaining as much as 0.5% earlier on rising bets of interest rate cuts following soft inflation prints.
Data showed German producer prices fell more than expected in November, a day after another set confirmed that euro zone inflation slowed sharply to 2.4% last month on a year-on-year basis. The German DAX, however, dipped 0.1%.
“Following the federal government’s decisions on the 2024 federal budget, it is becoming apparent that the inflation rate in Germany will not fall again in January but will probably even increase slightly further,” Commerzbank Research analysts noted.
“This could also affect other groups of goods in the following months and thus contribute to the core inflation rate stabilizing well above the ECB’s target of 2%.”
Meanwhile, British inflation dropped way more than expected last month, with the headline rate falling to its September 2021 lows. UK’s FTSE 100 climbed 0.9%, hitting its highest level since late May.
Cooling inflation and evidence of economic weakness have bolstered bets of rate cuts, prompting strong gains in stocks globally. The STOXX 600 has gained 12% year-to-date, with the German DAX and France’s CAC-40 hitting record highs last week.
Among major movers, argenx slumped 31% to the bottom of the STOXX 600 after reporting negative top-line results from its ADDRESS study. KBC also cuts its stock rating to “accumulate” from “buy”.
The stock is set to erase 7.6 billion euros in market cap.
Belgium’s BEL 20 blue-chip index dropped 3.3%, on track for its biggest one-day decline so far this year, if losses hold.
Meanwhile, Telefonica climbed 4.5% to top the STOXX 600 after the Spanish government said it would buy a stake of up to 10% in the company in a counterbalance to a similar acquisition by Saudi Arabia’s STC.
The broader telecommunications index advanced 1%, leading sectoral gains.
Intertek Group rose 3% after Exane BNP Paribas upgraded the British product testing firm to “outperform” from “underperform”.
Deutsche Post lost 1.9% after U.S. peer FedEx cut its full-year revenue forecast and reported lower-than-expected quarterly profit.
DS Smith shed 2.2% after UBS downgraded the British cardboard maker to “neutral” from “buy”.
(Reporting by Khushi Singh; Editing by Eileen Soreng)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or Producer Price Index (PPI).
Interest rates are the cost of borrowing money or the return on investment for savings, expressed as a percentage. They are influenced by central bank policies and economic conditions.
A stock index is a measurement of the performance of a group of stocks, representing a particular market or sector. Examples include the STOXX 600 and the German DAX.
Market capitalization, or market cap, is the total market value of a company's outstanding shares of stock, calculated by multiplying the share price by the total number of shares.
Explore more articles in the Top Stories category
