- Fed scaled back rate outlook, cited financial-market turmoil
- Stoxx 600 on track for its first weekly decline in five
European stocks closed little changed, almost erasing intraday losses, as a surge in oil countered a decline in banks and exporters.
Miners and energy shares tracked gains in crude, with Anglo American Plc and Glencore Plc up more than 9 percent. Banks were among the worst performers on the Stoxx Europe 600 Index, while BMW AG and Continental AG led carmakers lower.
Europe’s benchmark lost less than 0.1 percent at the close. It reversed an early advance of 0.4 percent to tumble as much as 1.8 percent, before paring losses. The Federal Reserve late yesterday signaled a slower pace of rate increases, citing the potential impact from weaker global growth and financial-market turmoil.
“The market is reflecting overall that the outlook isn’t particularly rosy, but it isn’t Armageddon either,” said Martin Todd, who helps manage the 559 million-pound ($803 million) Hermes Sourcecap European Alpha Fund in London. ““Ultimately it’s global growth concerns bogging down equities.”
China’s slowdown and a deepening rout in oil stoked investor worries earlier this year, dragging the Stoxx 600 into a bear market. While the gauge rebounded as much as 14 percent since a Feb. 11 low amid a rally in banks and miners, it’s now heading for its first weekly decline in five, down 0.6 percent.
British American Tobacco Plc and 12 other companies traded without the right to dividends today, shaving 0.2 point off the Stoxx 600.
Banks, the worst hit in this year’s rout, capped their longest losing streak in a month. Banco Popolare SC and Banca Popolare di Milano Scarl tumbled 5.5 percent or more amid speculation of hurdles to a merger between the two.
The dollar’s weakening after the Fed meeting hurt European exporters and helped commodity producers. Germany’s DAX Index dropped 0.9 percent for one of the worst performances in western Europe, while miners rallied 6.4 percent, the most in two weeks. Rio Tinto Group gained 5.4 percent after saying Jean-Sebastien Jacques will replace Sam Walsh as Chief Executive Officer in July.
Deutsche Lufthansa AG fell 4.6 percent after the carrier forecast weak earnings growth this year, as low ticket pricing meant it couldn’t fully benefit from cheap oil prices. Immofinanz AG slid 11 percent after the real-estate company reported a nine-month loss, with its Russia portfolio hurt by currency swings.