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Adam Sarhan MarketWatch Quote: European stocks fall after data deluge

Market WatchDec 10 2013

Telecoms move after ratings changes

By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets dropped on Tuesday after a mixed bag of data from China and major euro-zone economies, while speculation about potential tapering in the U.S. also provided an uncertain backdrop.
The Stoxx Europe 600 index (STX:XX:SXXP)  lost 0.7% to close at 314.91, after swinging between gains and losses earlier in the day. U.S. 
“Stocks have had a very strong rally for the entire year and what’s happening now is that markets are waiting for new catalysts and signals on what the central banks will do,” said Adam Sarhan, chief executive at Sarhan Capital.
“The global economy is barely growing and is not that robust. Specifically in Europe, investors want to know that if the central banks slow down [on monetary easing], will the economies be able to stand on their own two feet or will they slip into a recession again?,” he said.
One of the possible catalysts in the near term is the Federal Reserve meeting next week, where investors fear the U.S. central bank could put a knife to its bond-buying program. On Monday, James Bullard, a Fed voting member, advocated a small taper.
Among notable movers on Tuesday in Europe, shares of European Aeronautic Defence & Space NV (EPA:FR:EAD) (OTN:EADSY)  lost 2.6%. The aerospace giant said Monday it will cut 5,800 jobs at its Airbus Defence and Space unit, but some of the company’s top executives said Tuesday it could cut fewer jobs if labor unions agree to cost reductions.
French labor minister Michel Sapin said the company shouldn’t cut its overall staffing level in France and noted on French radio station Europe 1 that it is “unacceptable that a business like EADS cuts jobs overall while it has the capacity to take on those who lose their jobs” in another sector.
Telecom firms were also among major movers after a raft of ratings changes. Shares of Iliad SA (EPA:FR:ILD)  climbed 0.7% after Deutsche Bank lifted the telecom-services provider to buy from hold.
Shares of TeliaSonera AB (STO:SE:TLSN)  dropped in Stockholm 1.4% after Deutsche Bank cut the telecom firm to sell from hold.
Also in Sweden, Tele2 AB (STO:SE:TEL2B)  gave up 1.6% after HSBC cut the wireless telecom company to neutral from overweight.
And in Vienna, Telekom Austria AG (VIE:AT:TKA)  slid 1.4% after J.P. Morgan Cazenove cut the firm to underweight from neutral.

Data deluge

More broadly, investors digested the latest round of economic data from China and Europe. Data out of the world’s second-largest economy showed the industrial sector moderated its strong growth, but that retail sales picked up from an already robust pace.
In France, industrial output unexpectedly dropped 0.3% in October, extending the decline from September when it also fell 0.3%.
Meanwhile in Italy, industrial production rose a better-than-expected 0.5% in October, while data from Istat showed the recession is technically over as gross domestic product stopped shrinking and was flat in the third quarter. The FTSE MIB index (MCI:XX:FTSEMIB) , however, fell in line with the rest of Europe, down 0.3% to 18,236.72.
France’s CAC 40 index (ENX:FR:PX1) slumped 1% to 4,091.14. Germany’s DAX 30 index(ITF:DX:DAX)  dropped 0.9% to 9,114.44 and the U.K.’s FTSE 100 index (FTI:UK:UKX)  gave up 0.6% to 6,523.31.
Prudential PLC (LSS:UK:PRU)  gained 1.7% in London after the insurance firm said it remains on track to double its new-business profits from Asia and aims to generate at least £10 billion pounds of cash across the group over the next four years.