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Germany’s DAX ends off record as car stocks fall, euro retakes $1.10

European stocks finished slightly lower Tuesday, with declines in automobile shares and a rise in the euro drawing Germany’s benchmark down from its previous record.

The Stoxx Europe 600 index

SXXP, -0.02%

was down less than 0.1% to end at 395.91. The index on Monday ended up 0.1%, a second straight advance that kept the index around its highest level since August 2015.

The pan-European index’s recent gains have seen contributions from German and British blue chips, with the Germany’s DAX 30

DAX, -0.02%

 logging a record close Monday, and the U.K.’s FTSE 100

UKX, +0.91%

 scoring one Tuesday.

“Markets seem to be enjoying the signs that incumbent governments are set for victory in upcoming elections,” said Jasper Lawler, senior market analyst at London Capital Group, in a note.

German regional elections over the weekend appeared to bolster optimism for German Chancellor Angela Merkel’s prospects for September’s federal election. Meanwhile, U.K. Prime Minister “Theresa May is going for the jugular and markets like it,” he said. “Investor cheer at a Conservative victory has gotten even louder since Labour’s apparent plans for a ‘Robin Hood tax’ on financial transactions.”

The FTSE 100 index rose 0.9% to end at 7,522.03, marking a record and the first time it has closed above 7,500. The British benchmark was aided by downbeat action by the pound

GBPUSD, +0.2016%

despite British inflation hitting its strongest level in more than three years.

Read more: The pound faces these hurdles as it battles to reclaim $1.30

The DAX 30 on Tuesday tilted down less than 0.1% to end at 12,804.53, which still marked its second-best finish in history.

The export-oriented German equity market eased as the euro

EURUSD, +1.0843%

 traded above $1.10 for the first time since May 5, buying $1.1068. That’s up from $1.0975 late Monday in New York.

Read: Dollar slides to 6-month low as worries about Trump return

In Paris, the CAC 40

PX1, -0.21%

fell 0.2% to finish at 5,406.10.

Movers: Auto shares struggled after European car registrations fell 6.6% in April, according to data from the European Automobile Manufacturers’ Association out on Tuesday. On the DAX, shares of Daimler AG

DAI, -0.63%

 lost 0.5%, BMW AG

BMW, -0.89%

 declined 0.8% and Volkswagen AG

VOW3, -0.41%

 was 0.7% lower. Car tires manufacturer Continental AG

CON, -0.92%

 pulled back 1%.

BTG PLC

BTG, -6.79%

 dropped 6.8% after the drugmaker posted a decline in yearly pretax profit to 31.6 million pounds ($40.8 million), but noted a steady increase in demand for its Varithena varicose vein treatment.

Topping the FTSE 100, Vodafone Group PLC shares

VOD, +3.96%

VOD, +3.99%

 climbed 4% after the telecom forecast profit growth in the current year after hitting its organic growth target for fiscal 2017. Vodafone also raised its final dividend by 2% but posted an annual loss of 6.1 billion euros ($6.73 billion).

EasyJet PLC shares

EZJ, -7.25%

 dropped 7.3% after the budget carrier’s six-month net loss widened to 192 million pounds ($248 million). The airlines said weakness in sterling against the dollar and euro shaved £82 million off the bottom line.

Read: The ECB has 3 big reasons to wind up QE—here’s why it shouldn’t

Economic news: Eurozone economic growth expanded by 0.5% in the first quarter, according to the second estimate of gross domestic product from Eurostat. That was in line with forecasts and the flash estimate.

Article source: http://www.marketwatch.com/story/germanys-dax-eases-from-record-high-as-auto-shares-fall-euro-retakes-110-2017-05-16

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