By RTT News, September 17, 2013, 11:58:00 AM EDT
(RTTNews.com) - The European markets finished in negative territory Tuesday, pulling back from near 5-year highs. The Federal Reserve began its 2-day meeting today and investors were cautious ahead of tomorrow's announcement. There has been speculation that the central bank may decide to begin reducing the pace of its bond purchases. Strong economic data from Germany was unable to shift investor sentiment.
The International Monetary Fund completed its first review of Cyprus's performance under a three-year bailout program. The completion of the review enabled the disbursement of EUR 84.7 million.
The latest disbursement took overall payment to EUR 169.4 million. The lender also approved the modifications for the September 2013 fiscal targets as requested by the authorities.
"Cyprus is on track to meet its 2013 fiscal targets, thanks to the significant consolidation underway and prudent budget execution," said IMF Chief Christine Lagarde.
A bank's capital base and its holdings of liquid assets are both important in helping a bank to withstand certain types of shocks, the Bank of England said in its Quarterly Bulletin on Tuesday.
"It can be misleading to think of capital as 'held' or 'set aside' by banks; capital is not an asset," it said.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.09 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.47 percent.
The DAX of Germany dropped by 0.19 percent and the CAC 40 of France fell by 0.16 percent. The FTSE 100 of the U.K. decreased by 0.80 percent and the SMI of Switzerland lost 0.19 percent.
In Frankfurt, Schaeffler announced the placement of about 8 million shares in tire maker Continental, as the automotive and industrial supplier continues to reduce its debt. Continental declined by 3.11 percent.
Volkswagen fell by 1.67 percent, following unimpressive data on European car sales. Daimler decreased by 0.90 percent and BMW lost 0.50 percent.
Car parts maker Rheinmetall rose by 0.28 percent, after Commerzbank upgraded the stock to ''Buy'' from ''Hold.''
Biotechnology firm Qiagen dipped by 0.37 percent. UBS added the stock to ''Alpha Preferences Most Preferred List.''
In Paris, Renault and Peugeot dropped by 2.35 percent and 2.53 percent, respectively.
Sanofi finished up by 1.68 percent, after the European Commission granted marketing authorization for Genzyme's multiple sclerosis treatment Lemtrada.
In London, Aggreko declined by 4.00 percent. Credit Suisse downgraded the stock to "Underperform" from "Neutral."
UBS downgraded Glencore Xstrata to ''Neutral'' from ''Buy.'' The stock fell by 2.25 percent.
Lloyds Banking and Barclays lost 3.50 percent and 2.10 percent, respectively. The UK government sold 6 percent of stake in Lloyds Banking for $5.1 billion.
Philips fell by 1.93 percent in Amsterdam, after announcing new mid-term targets and share buyback.
The visible trade surplus of euro area increased less than expected in July, data from Eurostat revealed Tuesday. The trade surplus increased to EUR 18.2 billion from EUR 16.5 billion in June But it was below the expected level of EUR 20.5 billion and last year's EUR 13.9 billion surplus.
The Eurozone current account surplus decreased for the fourth consecutive month in July, largely due to a sharp decline in income, the European Central Bank said Tuesday. The current account surplus fell to seasonally adjusted EUR 16.9 billion from EUR 19.8 billion in June.
Europe's new passenger car registrations declined in August reflecting downturn across significant markets, the European Automobile Manufacturers' Association reported Tuesday. New car sales fell 5 percent from a year ago in August, offsetting July's 5 percent rise. Car registrations in the month of August totaled 653,872.
German investor confidence rose to its highest level in more than three years during September, driven by increasing expectations of the economic recovery gaining momentum amid an overall improvement in the Eurozone outlook.
The indicator of economic sentiment, which measures investors' expectations about the German economy in six months time, rose for the second straight month, climbing to 49.6 from 42 in August, the Mannheim -based Centre for European Economic Research said Tuesday. Economists had forecast a score of 45.
Driven by modest increases in transportation and clothing costs, U.K. inflation slowed for the second consecutive month, as expected, in August. In addition, factory-gate inflation fell markedly, indicating easing inflationary pressures in the pipeline. Inflation dropped to 2.7 percent from 2.8 percent in July, data published by the Office for National Statistics revealed Tuesday.
Consumer prices in the U.S. showed a modest increase in the month of August, according to a report released by the Labor Department on Tuesday, with the uptick in prices matching economist estimates. The Labor Department said its consumer price index inched up by 0.1 percent in August following a 0.2 percent increase in July.
Following four consecutive months of improvement, the National Association of Home Builders released a report on Tuesday showing that homebuilder confidence in the U.S. remained unchanged in September.
The report said the NAHB/Wells Fargo Housing Market Index came in at 58 in September, unchanged from the downwardly revised August reading. Economists had been expecting the index to come in unchanged compared to the reading of 59 originally reported for the previous month.
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