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Jan. 16, 2013, 12:09 p.m. EST

Europe shares struggle on growth fears

TUI AG soars as it approaches TUI Travel over possible combination

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By William L. Watts, MarketWatch

FRANKFURT (MarketWatch) — Concerns over global economic growth and a continuing political impasse surrounding the U.S. budget left European shares struggling for direction Wednesday.

The Stoxx 600 Europe index /zigman2/quotes/210599654/delayed XX:SXXP -0.66% erased a small decline to finish at 286.03, eking out a gain of 0.06 point, or less than 0.1%. The benchmark posted a marginal decline Tuesday after beginning the week with a 0.4% retreat on Monday.


Reuters
Jean-Claude Juncker, the prime minister of Luxembourg.

“There’s no conviction one way or the other,” said Keith Bowman, equity analyst at Hargreaves Lansdown in London.

Lingering questions about the outlook for global growth and, closer to home, the euro zone's ability to recover from recession helped cap upside for European shares after a strong run into the new year.

In Paris, the CAC-40 stock index /zigman2/quotes/210597958/delayed FR:PX1 -1.22%  rose 0.3% to 3,708.49, while Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -0.70% gained 0.2% to 7,691.13. London’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.71% lost 0.2% to close at 6,103.98.

Drug makers were the biggest contributors to the upside, with Sanofi SA /zigman2/quotes/206928357/delayed FR:SAN +0.47% rising 0.5% in Paris. Novartis AG /zigman2/quotes/203286410/delayed CH:NOVN +0.77% gained 0.7% in Switzerland, while Novo Nordisk A/S /zigman2/quotes/207193277/delayed DK:NOVO.B -0.03% added 1% in Copenhagen.

Shares of TUI AG /zigman2/quotes/206714402/delayed DE:TUI1 -4.48% rose 8.8% in Frankfurt. London-listed TUI Travel PLC said it had received an approach from TUI AG that “may or may not result in a combination of the two companies.”

TUI Travel PLC rose 3.9%.

Reflecting weakness across much of the mining sector in London, shares of Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +0.51% slumped 3.1%. Analysts at Société Générale cut its rating to sell from hold, saying that a restructuring planed by incoming Chief Executive Mark Cutifani may not herald as radical a reshuffle as initially anticipated.

Lonmin PLC was the biggest percentage decliner on the Stoxx 600, chalking up a 5.9% loss in London, while Xstrata PLC dropped 3.4%

European shares got off to a weak start, tracking a weaker tone in Asia after the World Bank on Tuesday cut its forecast for global growth.

The World Bank said it now expects growth of just 2.4% in 2013, barely stronger than the 2.3% rate seen in 2012 and down from an earlier estimate in June of 3%.

‘Currency wars’

Also, Luxembourg Prime Minister Jean-Claude Juncker was quoted late Tuesday as saying that the euro is “dangerously high.”

The remarks by Juncker, who chairs meetings of euro-zone finance ministers, sent the shared currency lower, while highlighting concerns about growth prospects for the region and continuing global currency tensions.

“Add the usual interventionist policies of emerging markets, and suddenly currency wars become a proposition which should not be dismissed so easily,” said Geoffrey Yu, strategist at UBS.

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Two dead in London helicopter crash

Two people, including the pilot, were killed when a commercial helicopter crashed in the center of London. (Photo: Getty Images.)

Meanwhile, worries over the U.S. budget impasse are also casting a shadow over global markets, said Bowman at Hargreaves Lansdown.

“Any move with regard [to the debt ceiling] would appear to give markets direction one way or the other,” he said.

A round of earnings results from major U.S. banks failed to provide much spark, he noted.

While shares of Goldman Sachs Group Inc. /zigman2/quotes/209237603/composite GS +0.02% gained ground on Wall Street after upbeat earnings, other banks including J.P. Morgan Chase & Co. /zigman2/quotes/205971034/composite JPM -0.21% lost ground despite seemingly solid results.

Wall Street saw U.S. stocks trade mixed. See: U.S. stocks drop as big banks report earnings.

Some European banks also came under pressure, with Société Générale SA /zigman2/quotes/206663756/delayed FR:GLE -3.05% trading down 2.8% in Paris and Lloyds Banking Group PLC /zigman2/quotes/202285510/delayed UK:LLOY -3.87% dropping 2.5% in London.

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/zigman2/quotes/210599654/delayed
XX : STOXX
368.78
-2.45 -0.66%
Volume: 0.00
Sept. 18, 2020 11:03p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
4,978.18
-61.32 -1.22%
Volume: 279,158
Sept. 18, 2020 6:05p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
13,116.25
-91.87 -0.70%
Volume: 185,861
Sept. 18, 2020 6:30p
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,007.05
-42.87 -0.71%
Volume: 1.54M
Sept. 18, 2020 4:56p
loading...
/zigman2/quotes/206928357/delayed
FR : France: Euronext Paris
88.44
+0.41 +0.47%
Volume: 5.62M
Sept. 18, 2020 5:35p
P/E Ratio
9.99
Dividend Yield
3.56%
Market Cap
€111.11 billion
Rev. per Employee
€330,656
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/zigman2/quotes/203286410/delayed
CH : Switzerland: SWX
CHF 82.93
+0.63 +0.77%
Volume: 12.40M
Sept. 18, 2020 5:30p
P/E Ratio
27.08
Dividend Yield
3.56%
Market Cap
CHF182.84 billion
Rev. per Employee
CHF405,818
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/zigman2/quotes/207193277/delayed
DK : Denmark: OMX
kr. 435.00
-0.15 -0.03%
Volume: 3.45M
Sept. 18, 2020 4:59p
P/E Ratio
24.76
Dividend Yield
1.98%
Market Cap
kr.1013.60 billion
Rev. per Employee
kr.2.59M
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/zigman2/quotes/206714402/delayed
DE : Germany: Frankfurt
3.24
-0.15 -4.48%
Volume: 125,918
Sept. 18, 2020 8:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€282,968
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/zigman2/quotes/201381512/delayed
UK : U.K.: London
1,979.00 p
+10.00 +0.51%
Volume: 4.93M
Sept. 18, 2020 4:35p
P/E Ratio
14.81
Dividend Yield
2.92%
Market Cap
£24.42 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/209237603/composite
US : U.S.: NYSE
$ 194.86
+0.03 +0.02%
Volume: 9.07M
Sept. 18, 2020 4:00p
P/E Ratio
14.82
Dividend Yield
2.57%
Market Cap
$67.05 billion
Rev. per Employee
$1.34M
loading...
/zigman2/quotes/205971034/composite
US : U.S.: NYSE
$ 98.35
-0.21 -0.21%
Volume: 20.12M
Sept. 18, 2020 4:00p
P/E Ratio
13.25
Dividend Yield
3.66%
Market Cap
$299.73 billion
Rev. per Employee
$497,647
loading...
/zigman2/quotes/206663756/delayed
FR : France: Euronext Paris
12.63
-0.40 -3.05%
Volume: 34.87M
Sept. 18, 2020 5:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
€9.91 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202285510/delayed
UK : U.K.: London
25.24 p
-1.02 -3.87%
Volume: 343.43M
Sept. 18, 2020 4:35p
P/E Ratio
61.56
Dividend Yield
0.00%
Market Cap
£17.86 billion
Rev. per Employee
N/A
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William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts.

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