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.
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Shares of ASML Holding /zigman2/quotes/210293876/composite ASML -4.56% /zigman2/quotes/206208657/delayed NL:ASML +1.73% 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 /zigman2/quotes/203546414/delayed FR:UG -4.21% 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 /zigman2/quotes/204528931/delayed UK:SGE 0.00% 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. /zigman2/quotes/201477239/delayed CH:ABBN -0.23% 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 /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.1210% jumped after the data, trading at $1.6580, up from $1.6473 late Tuesday.
The U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -1.29% slipped 0.1% to 6,826.33. Elsewhere in Europe, the German DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -0.35% fell 0.1% to 9,720.11 and the French CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -0.33% ended slightly higher at 4,324.98.
Shares of Allianz SE /zigman2/quotes/205544832/delayed DE:ALV -0.31% 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 /zigman2/quotes/210598065/realtime DJIA -1.99% were hurt by a drop for shares of International Business Machines Corp. /zigman2/quotes/203856914/composite IBM -2.02% , which reported fourth-quarter and full-year earnings outlooks that fell short of analysts estimates. Also read: IBM investors are weary of managed earnings.