Europe Stocks Drop as BOE Says No Projections for Messy BrexitBy
European stocks ended a two-day advance as Bank of England Governor Mark Carney said the institution hasn’t planned for a disorderly Brexit.
The Stoxx Europe 600 Index fell 0.5 percent at the close, the most since April 18. While the Bank of England left the benchmark interest rate unchanged Thursday, Carney said it hasn’t modeled for a disorderly Brexit process, in response to a question on how much the central bank’s forecasts are based on the assumption of a “smooth” exit from the European Union. The Stoxx 600 added 0.2 percent Wednesday as oil companies rallied after data showed U.S. crude stockpiles fell the most this year.
- Markets have moved down in response to Carney’s warning “about not having a plan B for Brexit,” Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany, said.
- All but three industry groups dropped, with telecom shares declining the most. Among shares active on corporate news, UniCredit SpA rose 3.7 percent after delivering first-quarter profit that exceeded analysts’ estimates.
- A positive economic backdrop and rate increases in Europe could spur more gains for Spain’s benchmark IBEX 35 Index, according to Banco Bilbao Vizcaya Argentaria SA’s Enrique Marazuela. While Spanish stocks’ best annual start since 1998 has driven the IBEX’s price-to-book ratio to the highest since March 2015, the factors that spurred the gains still hold, Marazuela says.
- According to Nicholas Melhuish, the head of global equities at Amundi Asset Management, “the outstanding cyclical sector in Europe is financials,” where he sees an attractive risk-reward situation.
— With assistance by Elena Popina