By Carla Mozee, MarketWatch
EDF shares driven sharply lower
European stocks moved up modestly Thursday, as bank shares rose after the U.S. Federal Reserve signaled a faster pace of interest rates than previously mapped out.
But shares in mining companies came under pressure, as the U.S. dollar continued its surge spurred by the Fed decision Wednesday.
The Stoxx Europe 600 index added 0.2% to 356.25, as financial, health care, industrial and tech shares advanced. But the basic resources sector was in the red. The Stoxx 600 on Wednesday ended down by 0.5%, (http://www.marketwatch.com/story/european-stocks-slip-from-multimonth-high-as-fed-looks-set-for-rate-hike-2016-12-14) easing from an 11-month high.
Bank gains: Bank stocks got a boost after the Fed lifted its key short-term interest rate (http://www.marketwatch.com/story/fed-raises-interest-rates-and-adds-another-hike-to-its-2017-forecast-2016-12-14) by a quarter of a percentage point and said it is penciling in three rate hikes in 2017, rather than the two increases it previously indicated.
Bond yields gained after the decision. That was another positive for banks, as higher yields bode well for profitability at lenders.
The Stoxx Europe 600 Bank Index moved 1.5% higher. Shares of German lender Deutsche Bank AG (DBK.XE) popped up 4.2%, France's BNP Paribas SA (BNP.FR) rose 3.8%, and Royal Bank of Scotland PLC (RBS.LN) (RBS.LN) climbed 2.4%.
Read: These are the bank stocks to buy -- and sell -- after this Fed-fueled run (http://www.marketwatch.com/story/these-are-the-bank-stocks-to-buy-and-sell-after-this-fed-fueled-run-2016-12-14)
Miners lower: But mining shares were pushed sharply lower, as a surging dollar put pressure on metals priced in the U.S. currency. The ICE U.S. Dollar late Wednesday hit its highest level since 2003 (http://www.marketwatch.com/story/dollar-holds-steady-as-investors-wait-for-fed-decision-2016-12-14) and was continuing its run higher Thursday.
Another concern is that the Fed rate hike could lead to higher borrowing costs in emerging markets, which could have a knock-on effect for miners.
Share in precious metals miner Fresnillo PLC (FRES.LN) tumbled 9%, while Centamin dropped 6.1% and steelmaker ArcelorMittal SA (MT) fell 1.5%.
Gold dropped more than 2%, trading at levels last seen in early February (http://www.marketwatch.com/story/gold-tumbles-to-10-month-low-as-post-fed-selloff-continues-2016-12-15), while silver lost 3.5%
Movers: Electricite de France SA (EDF.FR) sank 12% after the electricity supplier issued as profit warning for 2017.
Mediaset SpA shares (MS.MI) dropped 5.8% after France's Vivendi SA (VIV.FR) (http://www.marketwatch.com/story/vivendi-snaps-up-123-of-mediaset-2016-12-14)raised its stake in the Italian broadcaster to 20% (http://www.marketwatch.com/story/vivendi-now-holds-20-of-mediaset-2016-12-15). Vivendi has been steadily building its stake in the company this week, which has sent Mediaset shares soaring in previous sessions.
Individual indexes: Germany's DAX 30 index rose 0.6% to 11,310.22, while France's CAC 40 index rose 0.8% to 4,804.85.
Italy's FTSE MIB picked up 0.6% to 18,729.29 but the U.K.'s FTSE 100 index gave up 0.1% at 6,939.33 (http://www.marketwatch.com/story/ftse-100-slips-as-dollar-strength-hits-metals-bank-of-england-on-deck-2016-12-15). The Bank of England on Thursday is expected to leave its key interest rate unchanged.
Greece's Athex Composite fell 2% to 607.00. Read: Eurozone suspends short-term debt relief for Greece amid growing friction (http://www.marketwatch.com/story/eurozone-suspends-short-term-debt-relief-for-greece-amid-growing-friction-2016-12-14-121035321).
Economic docket: Growth in the eurozone economy likely picked up pace (http://www.marketwatch.com/story/eurozone-factory-activity-at-strongest-in-5-years-2016-12-15) at the end of 2016, surveys of purchasing managers indicated. The flash, or preliminary manufacturing PMI for the bloc in December came in at 54.9, a 68-month high, Markit said (https://www.markiteconomics.com/Survey/PressRelease.mvc/0d5a2f2a59af4e8d906183cd0fc9d9c6?s=1)Thursday.
However, the flash services PMI for the same month was at 53.1, a two-month low, while the composite PMI was unchanged at 53.9.
The euro changed hands at $1.0499, down from $1.0522 late Wednesday.
(END) Dow Jones Newswires
December 15, 2016 06:00 ET (11:00 GMT)
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