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Retailers act as a drag on European markets


Traders work on the floor of the New York Stock Exchange (NYSE). Photo: Reuters

Traders work on the floor of the New York Stock Exchange (NYSE). Photo: Reuters


Traders work on the floor of the New York Stock Exchange (NYSE). Photo: Reuters

European stocks were down by late afternoon yesterday, dragged down by steep drops in UK retailers.

The STOXX 600 was down 0.2pc, pulling back from a one-year high in the previous session and on course to snap a three-session winning run.

"The expected sales recovery ahead of Christmas failed to happen, and this rolls through to cautious company sales and (profit) guidance for 2018," Andrew Hughes, retail analyst at UBS, said in a note.

The exception was B&M. The value retailer was the top STOXX 600 riser, up 7pc, after reporting record Christmas trading.

The STOXX 600 is up nearly 12pc in the seven weeks since lows hit following the US presidential election, as investors bet that global growth and inflation will rise under President-elect Donald Trump.

Eurozone services PMIs provided further evidence of economic strength, as businesses ended 2016 by ramping up activity at the fastest pace for five-and-a-half years.

General Motors' December deliveries beat forecasts while Ford and Nissan posted surprise gains, increasing the likelihood that 2016 marked an unprecedented seventh straight year of sales gains.

The largest US carmaker said deliveries gained 10pc, beating analysts' estimates for an increase of about 4.4pc.

Ford's light-vehicle sales increased 0.1pc and Nissan's climbed 9.7pc, topping estimates for declines of 2.1pc and a 2.8pc.

The rate banks charge each other to borrow dollars for three months rose above 1pc yesterday for the first time since May 2009 as global interest rates extend their climb on expectations of accelerating growth and inflation.

The London interbank offered rate, or LIBOR, for three-month dollars was fixed at 1.00511pc, the highest level since 1.00688pc on May 1, 2009, which was also the last date the rate topped 1pc.

Libor is a global rate benchmark for $350 trillion worth of financial products worldwide.

Investors upgraded their outlook on business activity following Donald Trump's victory in the US presidential election, anticipating that a Republican-controlled White House and Congress would slash taxes, implement infrastructure spending and loosen regulations.

Dublin's Iseq overall index of Irish shares bucked the trend on European markets, trading up 0.23pc at 6540.40, a rise of 15.33.

Malin Corp was the day's biggest winner, with the life sciences firm's stock soaring by over 8pc to €13 per share.

Fuel retailer Applegreen was also up by over 5pc.

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