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Market Update

European Leaders Discuss Tax Evasion, Swiss Franc Slides 0.7%

Author: Nigel Thomas
Last Update: 10:29 AM ET May 22 2013

3:00 PM Frankfurt – European markets trended lower as leaders of European Union gather in Brussels to discuss corporate tax loop holes and curb tax evasion with Luxembourg and Ireland in focus. Pandora tumbled after the largest investor lowered the stake in the cosmetic jewelry maker.

European market indexes retreated from the recent highs today as European Union leaders meet in Brussels today to discuss efforts to step up corporate tax evasion and Ireland was in focus.

Bank of England policy setting committee rejected the proposal by Mervyn King to expand stimulus for the fourth month in a row. Six members of committee voted against the proposal according its minutes of meeting ending on May 9.

Benchmark indexes fell in 10 of 18 European markets and FTSE 100 index increased 0.2%, DAX index was nearly unchanged and CAC 40 index declined 0.3%.

Swiss Franc Weakens 0.7%

Swiss franc weakened after comments from Swiss National Bank President Thomas Jordan. The SNB established a cap of 1.20 francs to a euro in September 2011 and the currency broke through the level for the first time in two years today.

The franc declined to 1.2602 and dropped as low as 1.2611 against one euro after Jordan said central bank could shift its stand on the cap on the franc and pursue negative interest rates.

The central bank also confirmed that it holds 1,040 tons of gold and has accumulated foreign currency reserves equivalent of three quarters of economic output.

UK Retail Sales Fall

UK retail sales unexpectedly fell 1.3% in April, according to the latest data released by the Office for National Statistics.

ECB Urged to Loosen

Federal Reserve Bank of St Louise President James Bullard at a speech in Frankfurt that the Fed should continue to purchase government bonds because it is the best alternative available to support the economy.

He also urged European Central Bank to take aggressive steps or risk the decade-long deflation and low growth in Japan.

Stocks in Review

Pandora plunged 11% after the costume jewelry maker’s largest shareholder cut its holding to 40.9% and sold 13 million share to raise 2.6 billion kroner or $451 million.

Britvic Plc soared 11% after it reported first-half profit of 37.5 million pounds, ahead of 27 million pounds estimates by some analysts.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc