By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stock markets ended lower
Monday as investors awaited a speech by U.S. Federal Reserve
Chairman Ben Bernanke, while shares of TNT Express NV plunged after
United Parcel Service Inc. said European regulators would block its
proposed acquisition of the Dutch package-delivery company.
The Stoxx Europe 600 index fell 0.4% to close at 286.01. The
index posted a 0.3% loss last week.
Coloring the trading in Europe, stocks traded mixed on Wall
Street, with shares of Apple Inc. (AAPL) under pressure after news
reports said the company had cut orders for components used in its
iPhone 5 due to weaker-than-expected global demand. .
Shares of TNT Express plunged more than 41% and PostNL plummeted
nearly 36%, upended as UPS (UPS) said the European Commission would
refuse to approve the U.S. logistics group's proposed $6.8 billion
buyout of TNT Express over competition concerns. PostNL has been
attempting to dispose of its nearly 30% stake in TNT. .
In Paris, shares of Société Générale SA rose 3.8% and Credit
Agricole SA added 3%. Credit Suisse upgraded the French banks to
overweight, citing positive effects of 2012 asset disposals and
inexpensive valuations relative to peers.
Credit Suisse analysts also said they were positive on Crédit
Agricole's strategy of refocusing on its core franchise.
Deal news
The banking-sector gains helped the French CAC 40 index eke out
a 0.1% rise to 3,708.25.
Also higher in Paris, shares of Compagnie de Saint-Gobain SA
rose 0.4%. The company said Ardagh Glass Ltd. has made a "binding
and irrevocable" offer valued at $1.69 billion for the French
conglomerate's North American unit, which makes glass bottles and
jars. .
In other deal news, shares of Swatch Group AG rose 4.1% after
the Swiss watch company said it paid $750 million for the jewelry
and watch brand of Harry Winston Diamond Corp. (HWD) of Toronto.
Swatch also assumed as much as $250 million of pro forma net
debt.
Evans remarks; Bernanke next
European stocks got an early boost after comments from Charles
Evans, president of the Federal Reserve Bank of Chicago. Media
reports said Evans predicted the U.S. economy will grow by 2.5% in
2013, improving to a 3.5% growth rate for gross domestic product in
2014.
Coinciding with the close of U.S. trading on Monday, Fed chief
Ben Bernanke will give a speech in Ann Arbor, Mich., with a
question-and-answer session to follow.
Stephen Pope, managing partner at Spotlight Ideas, said equities
in Europe can attribute some recent gains to hopes that all central
banks, but crucially the Fed, will "remain tilted toward
intervention," as growth in developed economies remains tepid.
"If the sense that they will stay engaged is perceived then the
expectation that investors will achieve their desired rates of
return on capital deployed then we will see steady gains as
carefully selected 'risk-on' assets dominate the early 2013 asset
allocation decisions," Pope said in emailed comments.
"Be wary of fast-moving stocks that over the medium term are
unable to be price makers," he said. "Bottom line is going to be
vastly more important in 2013 than top line. Cost control [and]
liquidity will still dominate."
Monday movers
Among other regional indexes, the DAX 30 index rose 0.2% to
7,729.52 in Frankfurt, led by shares of German chemicals group BASF
SE , up 1.1%. Deutsche Bank said BASF remains its top pick in this
space, rated a buy. Linde AG also ranks among its top picks, with a
buy rating.
Linde rose 1.6%.
Shares of Volkswagen AG gave up an earlier gain to lose 0.1%.
Société Générale said it believes the auto maker will continue to
outperform in all major markets, but it did reduce earnings
forecasts on the group. Volkwagen's 2013 earnings before interest
and taxes forecast was cut to EUR14.4 billion from EUR15.8
billion.
In London, the FTSE 100 index lost 0.2% to finish at 6,107.86.
Broker action also commanded much of the action for the index.
Shares of Eurasian Natural Resources Corp. PLC , traded 3.5%
higher. Credit Suisse analysts upgraded its rating to outperform
from neutral, saying they believe that downside risks are now
limited and that there are potential re-rating catalysts this
year.
Heavyweight GlaxoSmithKline PLC (GSK) fell 0.7%. The
pharmaceutical said Monday that it submitted a diabetes drug
candidate for scrutiny before the U.S. Food and Drug
Administration. .
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