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Auto Shares Lead Declines in European Markets -- Update

27 Jun 2017 8:18 am
By Riva Gold and Ese Erheriene 

A decline in shares of car companies dragged down European stocks early Tuesday as investors waited for comments from global central bankers.

The Stoxx Europe 600 was off 0.5% in morning trading, weighed down by a 1.5% drop in the autos and parts sector. Automotive parts supplier Schaeffler warned late Monday on pricing pressures, sending its shares down over 10% early Tuesday.

The moves also came after General Motors Co. said Monday it expects industry vehicle sales to fall short of its original forecast for the year, with finance chief Chuck Stevens noting slowing U.S. sales in the first several months of the year.

An advance in Europe's resources sector helped offset declines in Europe, supported by a stabilization in iron-ore prices and gains across commodity markets including crude oil futures, gold and copper. Brent crude oil was last up 0.6% at $46.32 a barrel, while gold rose 0.5% to $1,250 an ounce.

Futures pointed to a 0.1% opening decline for the S&P 500 after shares of utility companies and other dividend-paying stocks led the index to a slim gain on Monday.

Elsewhere in markets, government bonds and currencies were little changed as investors waited for new comments from central bank officials later Tuesday, including remarks from European Central Bank President Mario Draghi, Bank of England Gov. Mark Carney and Federal Reserve Chairwoman Janet Yellen.

Ms. Yellen is set to speak in London on global economic issues as the Fed considers the timing of future interest-rate rises and the start of its plan to wind down its asset holdings.

During a slow news week as the second quarter comes to an end, "what matters most... is Fedspeak," said Kathy Lien, head of forex strategy at BK Asset Management.

Investors want to know whether Ms. Yellen believes recent softness in some U.S. economic data is transitory. Policy makers' latest forecasts suggest as much, continuing to project three interest-rate increases both this year and next.

Fed-fund futures tracked by CME Group suggest investors currently see just a 13% chance of a rate rise by the end of the September meeting.

"Should the remaining FOMC members start sounding notably more hawkish or the U.S. data generally surprise on the upside, the market can quickly change its mind," strategists at Commerzbank wrote in a note.

Earlier, stocks mostly extended modest gains in Asia-Pacific trading. Korea's Kospi edged up 0.1%, putting it on pace for another record close, while Japan's Nikkei added 0.4% to hit its best level in a week following an earlier decline in the yen. The dollar hit its best level against the Japanese currency in a month, briefly trading above Yen112 before retreating.

The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was last down 0.1%, with the dollar off 0.3% against the yen and 0.1% against the British pound.

Australian equities were 0.1% lower as gains among major banks and miners were offset by declines elsewhere, particularly in utilities and consumer shares.

Robert Wall and Kenan Machado contributed to this article.

Write to Riva Gold at riva.gold@wsj.com and Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

June 27, 2017 04:18 ET (08:18 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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