European Equity Benchmarks Close Lower; Health Care, Food Retailers Burden Markets

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The broad-based major European markets closed lower in Monday's trading session, as health care stocks and food retailers weighed down the markets.

In economic news, Eurostat, the statistical office of the European Union, reported that in 2016, flows of money sent by residents of the European Union (EU) to non-EU countries totaled EUR30.3 billion ($35.32 billion), compared with EUR31.3 billion in 2015. As inflows to the EU totaled EUR9.9 billion in 2016, this resulted in a negative balance for the EU with the rest of the world. The majority of personal transfers consist of flows of money sent by migrants to their country of origin.

The outflows of personal transfers in 2016 were highest from France, followed by the UK, Spain, and Italy. The highest inflows were recorded in Portugal and Poland, ahead of the UK and Romania. Meanwhile, the highest shares of inflows were recorded in Slovakia, Luxembourg, Hungary, and Poland.

The most recent IHS Markit Business Outlook survey reveals that UK business confidence has picked up slightly since June, but private sector firms still remain more cautious about their growth prospects than at any other time in the past six years. The net balance of survey respondents expecting business activity growth over the next 12 months is at +37% in October, little-changed from +35% in June and well below the peak seen in February 2014 (+66%).

In France, the IHS Markit Outlook survey points to improving optimism among private sector firms in France, with confidence levels regarding activity, profitability and capex all rising since June. Firms predict sharper cost inflationary pressures, although, these are set to be partially offset by increases in average selling prices amid strong demand forecasts. With a net balance of +38% of respondents anticipating an expansion in business activity, confidence across the French private sector is at a six-and-a-half year high in October, said IHS Markit. Firms generally attribute their optimism to an improvement in economic conditions in France and across Europe.

German firms are strongly optimistic about their prospects for growth in the year ahead, predicting further gains in business activity and employment, according to IHS Markit.

"However, the outlook for profits is dimmed by forecasts of a sharp rise in costs, particularly in the manufacturing sector," said IHS Markit. Private sector firms in Germany said they are highly confident about the chances of business activity rising over the next 12 months, with the degree of optimism unchanged from the previous survey in June. Almost half of companies expect activity to rise, compared with under one-in-ten predicting a reduction.

Also in Germany, the Federal Statistical Office (Destatis) reported that the selling prices in wholesale trade increased by 3.0% in October from the same month last year. In September and August the annual rates of change were +3.4% and +3.2%, respectively.

In equities, engineering services Babcock International Group led the FTSE lower, falling 7.3%, followed by beverage bottler Coca-Cola HBC, and healthcare services provider NMC Health, which lost 4.5% and 4.1% respectively. Aerospace company BAE Systems, and home improvement retailer Kingfisher were down 3.1% and 2.9%, while distribution and outsourcing company Bunzl and Wm Morrison Supermarkets each closed 2.7% lower.

In Frankfurt, industrial group ThyssenKrupp led the DAX into negative territory, falling 2.7%, followed by electricity and natural gas supplier E.ON, and reinsurance group Munich Re, which lost 1.6% and 1.3% respectively. Health care company Fresenius SE, and pharmaceutical firm Bayer were down 1.2% and 1.1%, while industrial gases company Linde, and stock market operator Deutsche Boerse each closed 1% lower.

In Paris, supermarket operator Carrefour, and oil services firm TechnipFMC led the CAC lower, falling 2.5% and 2.2% respectively, followed by pharmaceutical company Sanofi, which declined 1.3%. Steel and mining company ArcelorMittal, public relations firm Publicis Groupe, and telecommunications operator Orange each closed 1.2% lower.

The FTSE lost 0.24%, the DAX fell 0.40%, and the CAC-40 dropped 0.73%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Stocks , ETFs
Referenced Symbols: DAX

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