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French stocks slip in flat European market as vote nears
April 21, 2017 / 10:10 AM / 8 months ago

French stocks slip in flat European market as vote nears

LONDON (Reuters) - French blue-chip stocks underperformed other European benchmark indexes on Friday as investors retreated from risky bets ahead of the too-close-to-call first round of France’s presidential election.

The German share prize index (DAX) board is seen at the trading room of Frankfurt's stock exchange (Boerse Frankfurt) during trading session in Frankfurt Germany, October 14, 2016. REUTERS/Kai Pfaffenbach

The CAC .FCHI fell 0.4 percent, while the pan-European STOXX index added 0.1 percent. On the week they were down slightly but both indexes are less than 2 percent below their highest level this year hit last week.

“So far markets have been pretty sanguine in the face of the (French) presidential election, which was flagged as one of the potential banana skins for markets in this year,” Hargreaves Lansdown senior analyst, Laith Khalaf, said.

“There may be a bit of political weariness among investors, but also they may just be thinking that, actually, they’re not going to place market bets based on political events, and that would be an entirely sensible strategy,” he said.

Among French standout movers, Danone (DANO.PA) was the biggest faller on the CAC 40, down 2.5 percent after reporting first-quarter sales figures.

French banks Societe Generale (SOGN.PA) and BNP Paribas (BNPP.PA) extended the previous session’s gains, rising 1.7 percent and 2.2 percent respectively.

Banking stocks .SX7P, which are seen as benefiting from the victory of a mainstream candidate in the French vote, were the biggest sectoral gainers in Europe, up 0.7 percent, while basic resources stocks .SXPP ended flat after gaining initially on the back of slight gains in copper prices.

Earnings and deal-making drove stock price moves elsewhere, including a jump of 7.9 percent for Software AG SOWG.DE, making the shares the STOXX 600’s top gainer, after reporting first-quarter results. Software’s quarterly core profit declined less than expected.

Tech sector peer ASM International (ASMI.AS) rose 3.7 percent after Natixis raised its target price.

    Europe’s earnings season kicks off in earnest next week with Credit Suisse (CSGN.S), UBS (UBSG.S) and SAP (SAPG.DE) among those reporting results.

    European first quarter earnings are expected to increase 7.2 percent from the first quarter of 2016, according to Thomson Reuters I/B/E/S data. Excluding the energy sector, this would be a rise of 2.9 percent.

    Engineering firm WS Atkins ATKW.L gained 6.1 percent after Canada’s SNC-Lavalin Group (SNC.TO) said it would buy the firm for C$3.6 billion, firming up this month’s indicative offer.

    Among other standouts, Orkla (ORK.OL) fell 3.2 percent after going ex-dividend, while a downgrade from Panmure weighed on SSP Group’s shares (SSPG.L).

    Oil stocks .SXEP were a drag, falling 0.8 percent as crude prices retreated. [O/L]

    Additional reporting by Danilo Masoni; Editing by Jeremy Gaunt

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