Skip to Content
Market Update

European Markets Tread Cautiously

European indexes stuck to the flat-line amid cautious trades Friday as investors sat on the sidelines ahead of federal elections in Germany over the weekend.

Britain's FTSE 100 slipped 0.1% at 8:50 a.m., France's CAC 40 Paris gave up 0.2% while Germany's DAX Frankfurt edged down 0.1% after logging record performance in the previous session on heels of the U.S. Federal Reserve's decision to maintain monthly bond purchases.

German voters will be going to the polls this Sunday in what is dubbed as the most important election in the region since the financial crisis. So far, opinion polls have given a divided view, with chances likely that even popular chancellor Angela Merkel might find it difficult to clinch a winning coalition.

Meanwhile, in the U.S. the focus has now shifted to the debt-debate. U.S. leaders are under pressure to find ways to continue funding the government's borrowings. Treasury secretary Jack Lew had on Tuesday, warned the Congress against waiting until the last hour to raise the nation's debt ceiling as it could pose serious threat to the economy.

Stocks on the Move

Financials were listless with German lender Deutsche Bank AG and French giant BNP Paribas SA little changed.

Among others, Societe Generale SA eased 0.5%, Commerzbank AG dropped 1.2% and Lloyds Banking Group Plc. lost 0.8%.

In the resources segment, BHP Billiton Plc. and Rio Tinto were down around 0.5% while Anglo American Plc. retreated 1.7% after logging sharp gains in the previous session.

On the positive side, German automaker Daimler AG bounced 1.7% after confirming its full-year outlook. The company said it expects growth in the second half of the year to outpace that of its first half.

French luxury giant LVMH Moet Hennessy Louis Vuitton SA rose 0.5% after buying a majority stake in British shoe designer Nicholas Kirkwood's company for an undisclosed amount.

 Some pharma firms were also in news.

Sanofi SA reached a $40 million settlement in a U.S. lawsuit by ADR holders concerning the company's statements about a weight loss drug. Shares of the company were up 0.5%.

London-listed AstraZenecal Plc. also added 0.5% amid news the company along with Bristol Myers Squibb Co. has recalled around 92,000 underfilled vials of its jointly marketed Bydureon drug for diabetes.