European Markets Lower Ahead of Easter Holiday, Next Plunges15%

Lucy Stoeva
24 Mar, 2016
New York City

European market indexes closed lower ahead of the Easter holidays. Resource and energy stocks fell after the U.S. dollar strengthened and U.S. crude inventories increased. Next, the apparel retailer sank 15% on weak 2016 sales outlook. Italian banks were under pressure.

[R]4:00 PM Frankfurt, Germany – European market indexes closed lower ahead of the Easter holidays. Resource and energy stocks fell after the U.S. dollar strengthened and U.S. crude inventories increased. Next, the apparel retailer sank 15% on weak 2016 sales outlook. Italian banks were under pressure.[/R]

European stocks fell before closing for the holidays as resource and oil stocks took a hit by the strengthening dollar and the rising U.S. crude inventories.

The dollar extended its gains and rose against the other major currencies after Fed official James Bullard said another U.S. interest rate hike is possible in the near future.

Mining stocks declined, because the dollar-denominated commodities become more expensive for holders of other currencies. Anglo American was down 4.4%, Boliden dropped 3.2%, and Glencore slumped 1.5%.

U.S. crude stockpiles were at record highs for the sixth week in a row. The Energy Information Administration said crude stockpiles rose 9.4 million barrels last week.

Brent crude oil futures eased down 0.5% to 40.27 and WTI crude oil futures lost 0.9% to 39.45.

Among oil producers, Tullow Oil fell 5.6%, Seadrill tumbled 3.7%, while Repsol and Total erased 1.8% each.

Most of the major European markets will be closed on Friday and Monday in observance of the Catholic Easter holiday.

In Italy, shares of the cooperative banks Banco Popolare SC and Banca Popolare di Milano lost between 1% and 2% on concerns about the pending merger.

The merger is supported by the government and will result in Italy’s third-largest bank by assets, but investors are concerned about the ability of the banks to raise capital and cut costs.

Next Plc sank 15.1% after the British apparel retailer said it expected a very difficult 2016 because of the global economic uncertainty.

In London, the FTSE 100 was up 2.78 to 6,195.52, while in Frankfurt, the DAX index rose 29.90, or 0.30%, to 10,019.90.

In Paris, the CAC 40 index fell 12.82, or 0.29%, to 4,419.15.

Next Plc tumbled 15.1% to 5,655 pence after the U.K.-based apparel retailer warned of a difficult 2016 and blamed it on global economic uncertainty.

For the year ended January 30, the fashion retailer reported pre-tax profit of £836.1 million, up from £782.2 million a year earlier.

For the current financial year, the retailer lowered sales outlook to decline between 1% and 4%, compared with previous estimate of growth between 1% and 6%.

The apparel retailer estimated international online sales to grow by 25% to £205 million.