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May 26, 2021, 10:29 a.m. EDT

European stocks struggle as investors look for catalysts

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By Barbara Kollmeyer

Stock prices in Europe flattened out Wednesday afternoon, with banks under pressure. Marks & Spencer shares rose after well-received results.

The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.75% was flat, alongside the German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.80% and the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +1.07% , the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.56% fell 0.3%. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0652% and euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.1548% traded slightly lower against the U.S. dollar.

Bank stocks slipped as bond yields eased, with that of the 10-year German bund /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y +11.03% down 3 basis points to negative 0.198%, and the yield on 10-year U.K. gilts /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y -2.50% fell 3 basis points to 0.76%.

Yields slipped on the view that central banks won’t rush to tighten acccommodative policies put in place to help combat the COVID-19 crisis. But some investors fear recent climb in U.S. consumer prices could prompt a sooner-than-expected move by the Federal Reserve to step back from its accommodative policy.

That’s despite reassurances from most Fed members that they view near-term pressures as transitory. Investors will hear from Federal Reserve Vice Chair Randal Quarles on Wednesday. U.S. stocks traded modestly higher, following Tuesday’s losses.

At least one European Central Bank was heard trying to reassure over policy on Wednesday. Fabio Panetta, an executive board member at the central bank said it was “clearly premature” to discuss any paring of emergency asset buying in the single currency zone even though the economic outlook is “improving.”

“From my viewpoint, the conditions that we see today do not justify reducing the pace of purchases,” Panetta said in an interview with Nikkei that published Wednesday.

Losses for heavily weighted banks pressured the main index.  A steepening yield curve helps banks borrow cheaper and then lend at higher rates of interest. A flattening yield curve works the opposite. Shares of HSBC /zigman2/quotes/208272822/composite HSBC +0.43% /zigman2/quotes/203901799/delayed UK:HSBA +0.58% , BNP Paribas /zigman2/quotes/206351084/delayed FR:BNP +0.61% , and Banco Santander /zigman2/quotes/202859081/composite SAN +0.39% /zigman2/quotes/205677933/delayed ES:SAN +0.45% all fell over 1% each.

Shares of Marks & Spencer /zigman2/quotes/206225481/delayed UK:MKS -2.21% surged 7%. The retailer swung to a pretax loss for fiscal 2021 on lower revenue. But it said for the first six weeks of fiscal 2022, business was ahead of a two-year-earlier comparative. Marks & Spencer also warned over continued uncertainty and rising costs due to the pandemic and Brexit, but analysts were looking at the positives.

“MKS is emerging from COVID with a stronger B/S [balance sheet] and 21/22has started well, as improving mobility has led to 2-year stack growth in both corecategories,” said a team of analysts at Jefferies led by James Grzinic.

Shares of Spire Healthcare /zigman2/quotes/209744655/delayed UK:SPI -0.21% climbed 26% after Australian multinational healthcare group, Ramsay Health Care /zigman2/quotes/202494035/delayed AU:RHC +2.55% said it would buy the independent hospital group for 240 pence per share in cash.

Shares of Johnson Matthey /zigman2/quotes/207054035/delayed UK:JMAT +1.60% eased 0.4% after earlier gains. The chemicals and sustainable-technologies company announced a partnership with U.S.-based Plug Power /zigman2/quotes/205453512/composite PLUG -1.86% to develop improved hydrogen electrolysers. Plug Power is a leading manufacturer of electrolysers used to manufacture green hydrogen. 

/zigman2/quotes/210599654/delayed
XX : STOXX
473.21
+3.50 +0.75%
Volume: 0.00
Oct. 22, 2021 3:46p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,597.01
+124.45 +0.80%
Volume: 26,366
Oct. 22, 2021 3:46p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,758.01
+71.84 +1.07%
Volume: 31,622
Oct. 22, 2021 3:46p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,230.43
+40.13 +0.56%
Volume: 216,748
Oct. 22, 2021 2:46p
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/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.3785
-0.0009 -0.0652%
Volume: 0.0000
Oct. 22, 2021 10:01a
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/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.1645
+0.0018 +0.1548%
Volume: 0.0000
Oct. 22, 2021 10:01a
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/zigman2/quotes/211347112/realtime
add Add to watchlist BX:TMBMKDE-10Y
BX : Tullett Prebon
-0.09
+0.01 +11.03%
Volume: 0.00
Oct. 22, 2021 4:01p
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/zigman2/quotes/211347177/realtime
add Add to watchlist BX:TMBMKGB-10Y
BX : Tullett Prebon
1.17
-0.03 -2.50%
Volume: 0.00
Oct. 22, 2021 3:00p
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/zigman2/quotes/208272822/composite
US : U.S.: NYSE
$ 30.13
+0.13 +0.43%
Volume: 177,711
Oct. 22, 2021 10:01a
P/E Ratio
13.31
Dividend Yield
3.62%
Market Cap
$122.73 billion
Rev. per Employee
$330,477
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/zigman2/quotes/203901799/delayed
UK : U.K.: London
437.25 p
+2.50 +0.58%
Volume: 6.25M
Oct. 22, 2021 2:46p
P/E Ratio
13.24
Dividend Yield
3.64%
Market Cap
£88.80 billion
Rev. per Employee
£257,711
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/zigman2/quotes/206351084/delayed
FR : France: Euronext Paris
57.94
+0.35 +0.61%
Volume: 643,485
Oct. 22, 2021 3:46p
P/E Ratio
9.37
Dividend Yield
4.59%
Market Cap
€71.93 billion
Rev. per Employee
€461,970
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/zigman2/quotes/202859081/composite
US : U.S.: NYSE
$ 3.90
+0.02 +0.39%
Volume: 180,981
Oct. 22, 2021 10:00a
P/E Ratio
10.15
Dividend Yield
0.98%
Market Cap
$66.81 billion
Rev. per Employee
$384,895
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/zigman2/quotes/205677933/delayed
ES : Spain: Madrid
3.33
+0.02 +0.45%
Volume: 68.46M
Oct. 22, 2021 3:46p
P/E Ratio
10.38
Dividend Yield
1.18%
Market Cap
€57.36 billion
Rev. per Employee
€337,634
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/zigman2/quotes/206225481/delayed
UK : U.K.: London
176.60 p
-4.00 -2.21%
Volume: 1.20M
Oct. 22, 2021 2:46p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£3.54 billion
Rev. per Employee
£131,430
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/zigman2/quotes/209744655/delayed
UK : U.K.: London
233.50 p
-0.50 -0.21%
Volume: 1.23M
Oct. 22, 2021 2:45p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£938.00 million
Rev. per Employee
£77,024
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/zigman2/quotes/202494035/delayed
AU : Australia: Sydney
$ 69.20
+1.72 +2.55%
Volume: 532,141
Oct. 22, 2021 4:10p
P/E Ratio
35.93
Dividend Yield
2.19%
Market Cap
$15.33 billion
Rev. per Employee
$155,699
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/zigman2/quotes/207054035/delayed
UK : U.K.: London
2,726.00 p
+43.00 +1.60%
Volume: 99,492
Oct. 22, 2021 2:46p
P/E Ratio
25.66
Dividend Yield
2.57%
Market Cap
£5.17 billion
Rev. per Employee
£1.07M
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/zigman2/quotes/205453512/composite
US : U.S.: Nasdaq
$ 33.05
-0.63 -1.86%
Volume: 2.83M
Oct. 22, 2021 10:01a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$19.34 billion
Rev. per Employee
N/A
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