London (AFP) – European stock markets pulled back Wednesday as worries over Greece offset positive German data, analysts said, with focus also on the aviation sector as more details of the Alps plane crash emerged.
London’s benchmark FTSE 100 index shed 0.41 percent to 6,990.97 points, while Frankfurt’s DAX 30 index fell 1.17 percent to 11,865.32 points and the CAC 40 in Paris dropped 1.32 percent to 5,020.99 points.
The euro climbed to $ 1.0960 from $ 1.0919 late in New York on Tuesday.
German business confidence rose to its highest level in eight months in March, as optimism continues to grow about the outlook for Europe’s biggest economy, the Ifo economic institute said Wednesday.
The Ifo institute’s closely-watched business climate index rose to 107.9 points this month, its highest level since July 2014, the think tank said in a statement.
“Despite the latest German Ifo business climate data beating expectations, this good news couldn't inspire much growth in the DAX, or the rest of the eurozone, with the region appearing to be hampered by the euro taking back some of yesterday's losses against the dollar alongside more worries about Greece's financial situation,” said Connor Campbell, analyst at Spreadex trading group.
The European Central Bank has written to Greek banks urging them not to increase their exposure to Greek sovereign debt to avoid endangering the solidity of their finances, a source told AFP on Wednesday.
The ECB, which took over as European banking supervisor last November, was concerned about the risk “that (Greek banks’) balance sheets might be impaired by assets of low quality”, said the source familiar with the central bank’s thinking on the matter.
Attention remained on airlines a day after an Airbus plane flown by budget carrier Germanwings crashed in the French Alps, killing all 150 passengers and crew.
Shares in German parent group Lufthansa shed 1.44 percent to 13.37 euros after sliding by a similar amount Tuesday. Airbus shares dropped 2.35 percent to 58.89 euros.
Lufthansa chief Carsten Spohr on Wednesday said the plane operated by its low-cost subsidiary Germanwings had been “in perfect condition”.
In Italy, shares in Italian auto design group Pininfarina surged more than 20 percent on a report that Indian conglomerate Mahindra was planning a takeover bid.
Quoting sources close to the negotiations, Bloomberg said Mahindra was on the verge of purchasing the company responsible for the design of more than 1,000 cars for the likes of Ferrari, Alfa Romeo and Peugeot.
Both companies declined to comment.
– Data dampens Wall Street –
Elsewhere, Shanghai stocks retreated for the first time in 11 sessions Wednesday on profit-taking but other Asian equity markets were mixed.
US stocks fell Wednesday following disappointing data.
“A surprise fall in durable goods orders in February raised uncertainty over the health of the US economy and the likely timing of changes to interest rate policy,” said analyst Jasper Lawler at CMC Markets.
New orders for long-lasting manufactured goods fell 1.4 percent from January to $ 231.3 billion.
“Durable goods excluding transportation have now fallen five months in a row, marking the worst performance since the 2008 financial crisis,” he said.
In midday trading the Dow Jones Industrial Average was down 1.01 percent to 17,828.87 points. The broad-based S&P 500 climbed fell 0.96 percent to 2,071.41, while the tech-rich Nasdaq Composite Index slumped 1.77 percent to 4,906.47.
Meanwhile, shares in Kraft surged 37 percent to $ 84.11 after an announcement it would be merged with Heinz to create the world’s fifth-largest food company, with around $ 28 billion in annual sales.
Heinz’s owners 3G Capital and Berkshire Hathaway agreed to pay about $ 10 billion in a special dividend of $ 16.50 per share to Kraft shareholders in the deal, which represents a 27 percent premium on Kraft’s closing price on Tuesday.
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