European Markets Finish Mostly Lower As Trump Rally Fizzles

(RTTNews) - The European markets got off to a positive start Friday, but were ultimately unable to sustain their early gains. One notable exception was the DAX of Germany, which received a boost from strong earnings out of insurer Allianz.

The FTSE of the U.K. was among the weakest performing markets in Europe at the end of the trading week. The British pound rallied to a 5-week high Friday and Brexit worries also returned to the fore after some MPs told the BBC they are prepared to vote against triggering Article 50.

As investors have had more time to fully digest the surprise victory of Donald Trump in Tuesday's U.S. presidential election, the subsequent rally has begun to fade. Traders are beginning to shift toward more of a wait and see attitude, as they await a Trump presidency in January.

Donald Trump winning the U.S. presidential election is a major event, but it is too early to say if that would affect the policy decision in December, European Central Bank Executive Board member Benoit Coeure said.

"It is not for the ECB to assess the political consequences," Coeure said in an interview to the newspaper Le Progrès de Lyon and other French newspapers, published Friday.

"But it holds a lesson for Europe: in a world where shocks are increasing, Europe must keep control of its destiny."

Regarding the impact of the U.S. election result on the ECB's December interest rate decision, Coeure said, "It is too early to say. In the short term we are closely monitoring the reaction of the financial markets."

"Excessive volatility must be avoided. Looking ahead, we will assess the consequences of Mr. Trump's election for the global economy and for the euro area," he said.

The pan-European Stoxx Europe 600 index weakened by 0.53 percent. The Euro Stoxx 50 index of eurozone blue chip stocks decreased 0.54 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.70 percent.

The DAX of Germany climbed 0.36 percent, but the CAC 40 of France fell 0.92 percent. The FTSE 100 of the U.K. declined 1.43 percent and the SMI of Switzerland finished lower by 0.61 percent.

In Frankfurt, insurer Allianz climbed 1.38 percent after its third-quarter profit beat forecasts amid good performance across its business classes.

Shares of utility Innogy weakened by 3.13 percent after the company, which was split from RWE last month, reported lower net income for the first nine months of fiscal year.

Deutsche Bank gained 4.25 percent and Commerzbank added 1.37 percent.

BMW increased 4.06 percent and Volkswagen climbed 1.42 percent. Daimler also finished higher by 1.82 percent.

In Paris, Peugeot advanced 2.41 percent and Renault close higher by 1.87 percent.

In London, Royal Dutch Shell declined 4.37 percent on a report that it plans to invest $10 billion in Brazil over the next five years.

SIG Plc plunged 20.98 percent after the building materials supplier forecast lower underlying pretax profit for fiscal 2016, reflecting weaker than anticipated trading conditions and intensified competition in the U.K.

Fresnillo sank 9.01 percent and Randgold Resources tumbled 6.73 percent as gold prices dropped.

Utility Enel finished unchanged in Milan after reporting an increase in nine-month profit.

Germany's inflation climbed to a two-year high in October, final data from Destatis revealed Friday. The consumer price index climbed 0.8 percent year-on-year in October, faster than the 0.7 percent rise seen in September. A similar higher rate was last reported in October 2014.

On a monthly basis, consumer prices gained 0.2 percent after rising 0.1 percent in September. Both annual and monthly inflation figures matched preliminary estimates published on October 28.

Germany's wholesale prices increased for the first time in more than three years in October, figures from Destatis showed Friday. Wholesale prices climbed 0.5 percent in October from prior year, reversing a 0.3 percent drop in September.

U.K. construction output expanded unexpectedly in September reversing a decline seen a month ago, the Office for National Statistics reported Friday. Construction output grew 0.3 percent on month in contrast to August's 1.1 percent decrease. Output was forecast to drop 0.4 percent.

After showing U.S. consumer sentiment at its lowest level in over a year in the previous month, the University of Michigan released a report on Friday showing that consumer sentiment rebounded to a six-month high in November.

The preliminary report showed that the consumer sentiment index jumped to 91.6 in November after slumping to 87.2 in October. Economists had expected the index to inch up to 87.5.