Tobacco sector under pressure after broker downgrades
By Polya Lesova, MarketWatch
LONDON (MarketWatch) — European stocks fell in volatile trading on Friday, as investors awaited U.S. labor-market data due later in the session.
The Stoxx Europe 600 index (ST:STOXX600 280.70, -0.79, -0.28%) fell 0.4% to 280.34 points in morning trading. The index gained 0.4% on Thursday, but most of the Continent’s regional benchmarks finished lower.
France’s CAC 40 index (FR:PX1 3,879, -25.26, -0.65%) slipped 0.6% to 3,881.09 and Germany’s DAX 30 index (DX:DAX 6,959, -22.82, -0.33%) dropped 0.2% to 6,968.
In the financial sector, shares of Deutsche Bank AG (DE:DBK 41.40, -0.20, -0.47%) retreated 1.2% and those of Societe Generale (FR:GLE 41.54, -0.60, -1.42%) fell 1.6%.
Spain’s IBEX 35 index dropped 1.7%, as shares of Banco Santander (ES:SAN 7.58, -0.19, -2.46%) slumped nearly 3%.
Italy’s FTSE MIB fell 1%.
Investors are eagerly awaiting data on U.S. nonfarm payrolls for December, due at 8:30 a.m. Eastern time, for more clues on the state of the American labor market. Expectations for the data are high after a report earlier this week showed a surge in private-sector employment in December.
Economists polled by MarketWatch are now expecting that 175,000 nonfarm jobs were created in December, up from 143,000 a few days ago. The unemployment rate is projected to remain unchanged at 9.8%.
In London, the FTSE 100 index (UK:UKX 5,982, -37.20, -0.62%) fell 0.6% to 5,985, as shares of technology firm ARM Holdings PLC (UK:ARM 459.30, -22.70, -4.71%) dropped 4.3%, giving up some of their strong recent gains.
The tobacco sector came under selling pressure after Citigroup downgraded cigarette makers Philip Morris International Inc. (PM 57.72, -0.78, -1.33%) , British American Tobacco PLC (UK:BATS 2,438, -43.50, -1.75%) and Imperial Tobacco Group PLC (UK:IMT 1,976, -43.00, -2.13%) to hold from buy. The broker said pricing and volume trends have weakened and it expects more bad regulatory news for the industry this year.
Shares of Imperial Tobacco fell 1.8% and those of British American Tobacco slipped 1.4%.
On the upside in London, shares of brewer SABMiller PLC (UK:SAB 2,274, +28.00, +1.25%) rose 1.5%.
U.K. retailer JD Sports Fashion PLC (UK:JD. 886.00, +20.50, +2.37%) rallied 3% after the firm said it expects to exceed current market expectations for pretax profit.
