Monday, 23 March 2015 21:52
LONDON: European shares slipped from multi-year highs on Monday, with car stocks hurt by a rise in the euro and lingering worries over Greece leading investors to book profits.
The STOXX Europe 600 Autos Index, which has risen around 30 percent this year, underperformed. Volkswagen fell 3 percent while Peugeot declined 2.1 percent.
The euro has fallen about 25 percent against the dollar over the past year, helping the auto industry by making exports cheaper.
However, the euro rebounded on Monday after comments by U.S. Federal Reserve officials, who said it was unclear how much more the dollar would strengthen against the euro.
Traders said that lingering uncertainty over Greece was also pegging back European stock markets.
Greek Prime Minister Alexis Tsipras is to meet German Chancellor Angela Merkel in his first official visit to Berlin on Monday, amid a standoff between Athens and its creditors.
“The market went up too far and too fast, and we are just pausing for a bit of breath. We also have unresolved issues over Greece, which could cause a short-term correction,” said Michel Juvet, chief investment officer at Swiss bank Bordier.
The pan-European FTSEurofirst 300 index was down 0.9 percent at 1,597.29 points, having climbed 0.8 percent on Friday to hit a 7-1/2-year high of 1,613.80 points.
Germany’s DAX, which hit a record high of 12,219.05 points last week, also shed 1.4 percent to 11,868.20 points.
CHINESE BID LIFTS PIRELLI
Shares in Pirelli rose 2 percent after China National Chemical Corp agreed to buy the Italian tyre maker, the world’s fifth largest, in a 7.1 billion euro ($ 7.66 billion) deal.
Gary Paulin, co-founder of equity brokerage Aviate Global, said Europe was still “the place to be” for investors given new economic stimulus measures undertaken by the European Central Bank.
“While we have had some big inflows into Europe these past few weeks, we are still a long way from reversing the cumulative outflows seen since the crisis began. As such, talk of Europe being … near a ‘top’ may be a little premature,” he said.
Copyright Reuters, 2015
