European bank, energy shares slide; STOXX 600 eyes fifth straight weekly gain (updated)

Strategic Partners A/S

18/06/2021 09:40

(For a Reuters live blog on U.S., UK and European stock
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    * Banks slump as investors book profits
    * Industrial, real estate stocks among biggest gainers
    * Swiss blue-chips at record high
    * Car dealership Inchcape tops STOXX 600

 (Adds comments, updates prices)
    By Sagarika Jaisinghani
    June 18 (Reuters) - A slide in bank and energy stocks hit
European shares on Friday, with a hawkish policy outlook from
the U.S. Federal Reserve also casting a dampener on the STOXX
600's fifth straight weekly gain.
    The banking index  .SX7P , which typically does well when
interest rates are high, fell 1.2% to track an overnight slump
in its U.S. peer, as investors booked profits after steady gains
in the sector this year.  .N 
    Insurers  .SX7P , telecom stocks  .SXKP  and energy stocks
 .SXEP  lost between 0.8% and 1.2%, while industrials  .SXNP 
and real estate stocks  .SX86P  were among the biggest gainers.
    By 0824 GMT, the pan-European STOXX 600 index  .STOXX  was
down 0.2%.
    "The market has been polarised in certain positions," said
Andrea Cicione, head of strategy at TS Lombard.
    "We've been very positive on financials and energy since
last November and now we're seeing a reversal of that as
investors scale back. But this is temporary phase; there's
definitely more upside for financials and energy, which are
still relatively cheap."
    The STOXX 600 recently scaled record highs on assurances
from the European Central Bank that it would keep monetary
policy loose, but unexpected signals from the Fed around
tapering its massive stimulus dented demand for risky equities
this week.
    If the European benchmark index had ended higher on
Thursday, it would have marked its longest gaining streak in
nearly 15 years.
    Germany's DAX index  .GDAXI  fell 0.3% as data showed a
bigger-than-expected jump in May producer prices. But German
bond yields edged lower, with analysts expecting the adverse
reaction of euro zone bond prices to the Fed to be short-lived.
 urn:newsml:reuters.com:*:nL2N2O00IR
    Switzerland's blue-chip stock index SMI  .SSMI  rose 0.4% to
hit an all-time high and was on course for its 14th straight
days of gains.
    The European mining index  .SXPP  slipped 0.1%, bringing its
weekly decline to more than 5% due to lower metal prices.
 MET/L 
    Danish pharmaceutical company Orphazyme  ORPHA.CO  sank
60.1% after saying it had failed to win support from the U.S.
Food and Drug Administration for its arimoclomol drug, a
treatment designed for genetic disorder Niemann-Pick disease
type C.  urn:newsml:reuters.com:*:nL2N2O00CG
    Tesco  TSCO.L , Britain's biggest retailer, fell 2.3% as it
reported a sharp slowdown in quarterly underlying UK sales
growth, while car dealership Inchcape  INCH.L  topped the STOXX
600 after raising its annual profit forecast.  urn:newsml:reuters.com:*:nL3N2O01H4
    

 (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Shounak Dasgupta and Rashmi Aich)
 ((sagarika.jaisinghani@thomsonreuters.com))