* ECB keeps key rates unchanged; real estate stocks rise
* Lack of details in ECB comments hits bank stocks
* Indivior dives after U.S. DoJ indictment
* Novartis among top healthcare losers after Morgan Stanley
(Updates to close)
By Aaron Saldanha
April 10 (Reuters) – European shares rose slightly on
Wednesday as gains across most sectors offset losses among
lenders, which were hit by a lack of detail in European Central
Bank (ECB) comments after the bank left borrowing costs
The ECB’s decision on rates matched investors’ expectations
but President Mario Draghi’s comments shed very little light on
reported plans for a tiered deposit rate and a new round of
ultra-cheap bank loans.
The pan-European STOXX 600 index rose 0.3 percent,
although sentiment was capped by threats made by the United
States earlier this week to slap tariffs on European Union-made
Banks, which were broadly boosted some weeks ago on
reports of a planned ECB tiered deposit rate, dropped 0.3
percent as investors failed to get details on this from Draghi.
Commerzbank slid 2.3 percent, as German Chancellor
Angela Merkel said the result of its merger talks with Deutsche
Bank was open and after a report Deutsche Bank’s
chief executive told his Commerzbank counterpart that he wants
more time to consider a merger.
“European markets were given a lift by the ECB, but the
gains were limited thanks to the cautious tone adopted by Mario
Draghi,” Chris Beauchamp, chief market analyst at IG, wrote in a
“While European stocks have recovered, there is still much
to be done to repair the economic strength of the eurozone.”
Rate-sensitive real estate stocks raced up 1.8
percent in their best one-day showing since early 2019.
The sector index has a dividend yield of 4.15 percent,
according to Refinitiv Eikon data, and each stock on the index
ended Wednesday higher.
Unibail-Rodamco-Westfield rose 3.6 percent. It
announced a 850 million euro ($956.25 million) deal to sell an
office building in Paris after markets closed on Tuesday.
Retailers gained for the first time in five
sessions, with Tesco up 3.6 percent to lead sector
gains after beating full-year operating profit expectations.
European basic resources stocks added 1 percent,
with Norsk Hydro rising 1.3 percent. JP Morgan raised
its price target on the Oslo-listed aluminum giant, which
announced a 150 million Norwegian crown ($17.64 million)
facility upgrade on the day.
Higher oil prices aided a 0.7 percent rise in oil
and gas stocks.
A 0.4 percent loss among healthcare stocks tempered
the broad benchmark’s gains, with Novartis AG knocked 3
percent lower on the back of price target cuts by UBS,
Independent Research and Barclays.
Morgan Stanley also downgraded the Swiss pharmaceutical
giant, putting it at “underweight” and cutting its price target.
It said the spin-out of Alcon will “shine a spotlight
on the challenges from generic erosion facing Novartis’ pharma
London-listed Indivior Plc dived 71.6 percent after
the U.S. Justice Department announced the indictment of the
drugmaker and a unit on charges they engaged in an illegal
scheme to boost prescriptions of the film version of its opioid
addiction treatment Suboxone.
Reckitt Benckiser Group sought to play down any
potential impact to its infant formula business from the
indictment of Indivior – which it used to own – saying the risk
was theoretical and unlikely. Reckitt’s shares fell 6.5
Britain’s Britain’s FTSE 100 was little changed.
European Union leaders will grant Prime Minister Theresa May a
second delay to Brexit at an emergency summit but will argue
over how long and on what terms.
($1 = 0.8889 euros)
($1 = 8.5045 Norwegian crowns)
(Reporting by Aaron Saldanha
Additional reporting by Medha Singh and Susan Mathew in
Editing by Frances Kerry)
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