European stocks inch up ahead of central bankers meeting


The heads of the European Central Bank and the US Federal Reserve will address the summit on Friday

By Sara Sjolin

European stock markets traded in narrow ranges on Thursday, with investors taking a cautious approach as the Jackson Hole summit that has been hanging over markets this week was finally about to kick off, MarketWatch reports.

The Stoxx Europe 600 index was up 0.2% at 374.70, party recouping a 0.5% loss from Wednesday.

Stock markets in Europe and the US have flip-flopped between gains and losses this week, with volatility in part driven by US President Donald Trump’s threat to shutdown the government and uncertainty ahead of the annual gathering of global central bankers in Jackson Hole, Wyo.

The central bank summit begins on Thursday and runs through Saturday. European Central Bank president Mario Draghi and Federal Reserve chairwoman Janet Yellen will speak on Friday, with markets watching for hints on the future path for monetary policy.

“While this gathering is unlikely to result in any major policy decisions, it is still important for investors because of the role of central banks continue to have in market valuations,” said Rebecca O’Keeffe, head of investment at Interactive Investor, in a note.

“The big question for investors is whether conditions are changing, where markets will not be able to rely on central bank policies to support valuations forever,” she added.

The euro has strengthen recently on expectations Draghi will soon announce the beginning of the end of the ECB’s aggressive bond-buying programme. ECB sources have said, however, the central bank boss will not discuss future policy at the Jackson Hole meeting.

The shared currency on Thursday bought $1.1798, down from $1.1808 late Wednesday in New York.

Stock movers: Shares of Dixons Carphone plunged 26% after the mobile phone and electrical retailer warned fiscal 2018 profit would be much lower than last year, blaming challenging conditions in the UK mobile phone market.

CRH climbed 3% after the building materials company said it is selling its Americas Distribution business to Beacon Roofing Supply for $2.63bn in cash. Additionally, the Dublin-based company said it will buy Fels, a German lime and aggregates business, for €600m.

Provident Financial jumped 13%, adding to a 12% gain from Wednesday. The UK-based lender tumbled 66% on Tuesday after warning it will lose between £80m and £120m in the third quarter.

SimCorp tanked 10% after the software company’s earnings missed expectations.

Economic news: Economic growth in the UK was confirmed at 0.3% in the second quarter, according to the second estimate of the country’s gross domestic product from the Office for National Statistics. The reading was as expected, but the pound still slipped to $1.2788 after the data compared with $1.2807 before the report.

In France, confidence in the manufacturing sector jumped to an almost-decade high at 111 in August, up from 108 in July.

Indexes: France’s CAC 40 index added 0.2% to 5,126.61, while Germany’s DAX 30 index climbed 0.2% to 12,194.87.

The UK’s FTSE 100 index rose 0.4% to 7,414.19.

This article was published by MarketWatch

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