By Barbara Kollmeyer
LONDON (MarketWatch) -- Europe's benchmark stock index logged a
small gain on Wednesday, helped by big gains for ASML Holding NV
and Peugeot SA, as investors speculated about the potential for an
interest-rate hike after better-than-expected U.K. jobs data.
The Stoxx Europe 600 index nudged up 0.1% to close at 336.06, in
a session marked by seesaw action.
Shares of ASML Holding (ASMLD) topped the list of gainers with a
7% jump after the Dutch semiconductor-equipment maker reiterated
its forecast for the first half of 2014 and posted a 62% rise in
fourth-quarter net profit.
Shares of Peugeot rallied 5.8% after Moody's Investors Service
said the auto maker's planned 3 billion euro ($4.1 billion) capital
increase is a positive for its credit rating. The company said two
days ago it would raise the money via participation with
joint-venture partner Dongfeng Motor Group Co. and the French
state.
Sage rose 3.3% as the U.K. business-software maker said trading
across all its regions remains in line with forecasts and it is on
course to deliver its 6% organic-revenue growth target in 2015.
On the downside, shares of ABB Ltd. fell 3.6% after the
power-and-technology company said fourth-quarter earnings will be
hit by around $260 million in costs linked to North Sea power
projects and restructuring.
More broadly, investors digested a bigger-than-expected drop in
U.K. unemployment, which sparked fears the Bank of England could
raise interest rates earlier than previously anticipated. The
joblessness rate for the three months to November fell to 7.1%,
closing in on the central bank's threshold of 7% for considering
raising interest rates.
The central bank said, however, in minutes from its January
meeting -- also out on Wednesday -- that even if the 7%
unemployment threshold were to be reached in the near future, there
is no immediate need to raise its key interest rate.
With the joblessness rate approaching 7% faster than expected,
Philip Shaw, chief economist at Investec Securities, said he had
expected the central bank to have discussed various options to a
shift in policy guidance, but no such debate took place.
"What are the implications? A key intention of interest-rate
guidance was to placate fears of an imminent increase in interest
rates," Shaw said.
"The danger is that the high-profile decline in unemployment
actually intensifies speculation over a hike rather than quelling
it, even if the committee has no intention to push rates up for the
time being," he added.
The pound (GBPUSD) jumped after the data, trading at $1.6580, up
from $1.6473 late Tuesday.
The U.K.'s FTSE 100 index slipped 0.1% to 6,826.33. Elsewhere in
Europe, the German DAX 30 index fell 0.1% to 9,720.11 and the
French CAC 40 index ended slightly higher at 4,324.98.
Shares of Allianz SE fell 1.2% in Frankfurt in the wake of
Tuesday's news that Mohamed A. El-Erian will step down from the
role of chief executive officer for Pimco, a unit of Allianz, after
a year of big outflows for the asset manager's flagship fund. The
company said El-Erian will stay on the international executive
committee of Allianz and advise its board of management on global
economic and policy issues.
The trading mood in Europe was tempered by a mixed day for Wall
Street. The Dow industrials (DJI) were hurt by a drop for shares of
International Business Machines Corp. (IBM), which reported
fourth-quarter and full-year earnings outlooks that fell short of
analysts estimates. Also read: IBM investors are weary of managed
earnings.
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