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19 Jan 2021 | 17:52

Europe close: Shares dip, single currency finds a bid

(Sharecast News) - European shares finished lower on Tuesday, despite upbeat earnings reports and positive remarks on US stimulus measures by US Treasury Secretary nominee Janet Yellen. Losses also came despite still flat or falling numbers of Covid-19 infections throughout Western Europe, outside of Spain.

The pan-European Stoxx 600 dipped 0.19% to 407.92, while the UK's FTSE 100 slipped 0.11% to 6,712.95, and Germany's DAX was down 0.24% at 13,815.06.

Dragging on shares, euro/dollar was 0.38% stronger to 1.2123.

In a speech, ahead of her hearings before the Senate Finance Committee on Tuesday night, newly-minted US Treasury chief, Janet Yellen, said the US needs to "act big" with its Covid-19 stimulus package.

The "smartest" thing to do is aggressively pursue the previously announced plan, she added.

"Economists don't always agree, but I think there is a consensus now: Without further action, we risk a longer, more painful recession now - and long-term scarring of the economy later," Yellen was set to tell Congressmen.

President-elect Joe Biden's 'American Rescue Plan' included provisions such as extending enhanced unemployment benefits through to September and increasing those benefits from the current $300 a week to $400 a week, sending direct relief to families in the form of $1,400 checks, the national vaccine distribution plan and a series of other relief measures.

Upbeat corporate earnings also helped to boost sentiment and help markets hold on to gains, although that later gave way to some profit taking.

"These earnings reports will help provide a bit of clarity on how the corporate world is coping with the latest wave of coronavirus as the markets continue to weigh the rising infection rates globally with the pace of vaccine rollouts," said Russ Mould, an analyst at AJ Bell.

Swiss computer-software and peripherals company Logitech saw its stock surrender 8% gains at the open to end the day 6% lower, even after the group guided for 57% - 60% sales growth at constant currencies, compared with its previous outlook of 35% - 40%.

To take into account, the shares had roughly doubled in value over the preceding 12 months.

Stock in credit-reporting agency Experian dipped after the group said its performance in the last quarter was better than expected, with revenue growth of 7% at constant currencies in the three months to December 31.

Auto shares were down after the European Automobile Manufacturers' Association reported that passenger-car registrations fell by 3.3% in December 2020 compared with the year prior, topping off the worst year on record - registrations in 2020 fell 24%.

Shares in European car makers were lower, with Daimler, Volkswagen, BMW and Renault all in the red on the news.

However shares in Stellantis, the automotive giant formed out of the merger between Fiat Chrysler and Peugeot, bucked the trend to rise 5%.
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