European equity markets retreated today, giving back yesterday’s gains, as investors were prompted into some profit taking in the technology and financial sectors. The DAX, CAC and IBEX declined between 0.27% and 0.98%, while the London benchmark index fell from a 10-week high due to fairly modest earnings results.
On the macroeconomic front, German exports declined by 1.8% in March raising some concerns about the strength of the German economic recovery, adding pressure to the euro which fell more than 0.5% against the US dollar, trading around 1.375. In the UK, industrial output fell by 0.1% in March, against expectations of a modest 0.2% increase, while manufacturing output rise by 0.5% beating expectations.
LME base metals prices were fairly mixed today, while nickel reached a high at 20500 amid on-going concerns about nickel production disruptions in New Caledonia. There was news from Vale that production would restart “shortly” at their Goro plant.
In London, technology stocks were under pressure with Arm Holdings and Sage Group retreating 1.72% and 0.75%, respectively. Petrofac reported heavy losses in today’s trading session after plunging more than 15% following a profit warning, which raised worries about the company’s corporate earnings results.
On Monday, the main focus will turn to the US Federal Budget details for April, which could give further direction to the US dollar. In the meantime, the on-going crisis in Ukraine will continue to dominate the markets.