By Carla Mozee, MarketWatch
Investors also took notice of a decision by the People’s Bank of China to stand pat on interest rates, breaking a pattern of raising rates in the footsteps of the U.S. central bank.
The Stoxx Europe 600 Basic Materials Index /zigman2/quotes/212670217/delayed XX:SXPP +0.96% reversed course to end up 1.2%. Copper producer Antofagasta PLC /zigman2/quotes/200173667/delayed UK:ANTO +4.05% ended the session down 1.5%, off its lows of the day, while shares of Centamin PLC /zigman2/quotes/210323628/delayed UK:CEY +0.89% edged 0.2% lower, also cutting a steeper drop and Glencore PLC /zigman2/quotes/201400686/delayed UK:GLEN +0.42% /zigman2/quotes/209462106/delayed GLCNF -2.88% pivoted in to the green, closing 0.1% higher.
As expected, the U.S. Federal Reserve on Wednesday lifted its benchmark federal-funds rate by a quarter-percentage point—to a range of 1.75% to 2%. It also signaled it will raise rates a total of four times in 2018, compared with a previous outlook for three hikes. Wednesday’s rate increase was the second of the year.
What strategists are saying
“The shock announcement that the ECB will keep rates unchanged at least until mid-2019 has caused the euro to spiral lower. Whilst the information itself shouldn’t shock markets, the decisive comments today isn’t the usual style we see Mr. Draghi epitomize at monthly meetings,” said Alex Lydall, head of corporate FX at Foenix Partners, in a note.
“Although negative connotations are attached to the new rate information, Draghi did also note that asset purchases will extend to December, but only at a rate of 15 billion euros a month. This news will fill traders with confidence that the eurozone is stepping out of its troubled shadow, albeit at snail’s pace,” he added.
Aveva Group PLC /zigman2/quotes/202038414/delayed UK:AVV -0.70% rallied 12%. The industrial-software company said it was maintaining its dividend even as fiscal 2018 pro forma pretax profit fell 34%, stemming in part from reverse acquisition by France’s Schneider Electric SE /zigman2/quotes/200216351/delayed FR:SU +1.02%
Unilever PLC /zigman2/quotes/205449809/delayed UK:ULVR +0.53% /zigman2/quotes/204685760/composite UL +1.10% fell 2.8%. The consumer-goods maker’s CFO Graeme Pitkethly warned sales growth in the first half of 2018 will be below the full-year target of 3% to 5% , but maintained sales guidance for the year. Pitkethly also said it is “extremely unlikely” Unilever will maintain a primary listing in London after its move to consolidate in Rotterdam.
Shares of European payment processor Adyen NV /zigman2/quotes/205351021/delayed NL:ADYEN +0.87% fell 3.7% to €438, briefly reaching a high of €484 on the Euronext Amsterdam exchange Wednesday doubled during that session. The shares had priced at €240 each.
Rolls-Royce Holdings PLC shares jumped 6.5% after the British aircraft-engine maker said it would cut 4,600 jobs in its latest round of job reductions.
Retail sales for the U.K. in May surpassed consensus forecasts, as a stretch of good weather and Royal Wedding celebrations gave a fillip to spending in food and household goods stores.
Sales were up 1.3% on the month, the Office for National Statistics said. A print of 0.5% was expected. They were up 3.9% year-over-year, compared with 2.4% expected in a FactSet consensus estimate.