(RTTNews.com) - The European markets ended Friday's session with mixed results. A number of weaker than expected economic reports weighed on investors at the end of the trading week. Manufacturing data from China and the U.K. were disappointing, while unemployment in the Eurozone climbed to a record high.
The markets managed to recover some ground in the afternoon, following some better than expected economic reports in the U.S., including the stronger than expected ISM manufacturing data. However, investors continued to be cautious ahead of the looming spending cuts in the U.S., which are due to kick in on March 1st.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.61 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.27 percent.
The DAX of Germany dropped by 0.43 percent and the CAC 40 of France fell by 0.62 percent. The FTSE 100 of the U.K. climbed by 0.28 percent and the SMI of Switzerland gained 0.11 percent.
In Frankfurt, Deutsche Bank declined by 4.33 percent and Commerzbank lost 0.64 percent. Goldman Sachs downgraded Deutsche Bank to ''Sell'' from ''Neutral.''
RWE finished higher by 1.79 percent, after Citigroup upgraded the stock to ''Neutral'' from ''Sell.''
Deutsche Bank downgraded ADVA to ''Hold'' from ''Buy.'' The stock increased by 3.03 percent.
In Paris, Societe Generale dropped by 2.58 percent. BNP Paribas and Credit Agricole declined by 1.71 percent and 2.43 percent respectively.
Bouygues dipped by 0.09 percent, after Citigroup upgraded the stock to ''Neutral'' from ''Sell.''
Electronics firm Thales surged by 12.28 percent, after reporting higher annual earnings.
In London, Lloyds Banking sank by 2.24 percent, after reporting an annual loss. Royal Bank of Scotland declined by 3.06 percent, Barclays lost 1.16 percent and HSBC fell by 0.45 percent.
Miners finished firmly in the red, due to weak manufacturing data out of China. Kazakhmys is dropped by 4.68 percent, Eurasian Natural Resources fell 1.03 percent and Anglo American declined by 1.14 percent.
Rio Tinto decreased by 2.80 percent. The miner is reportedly planning to sell all or part of its 58.7 per cent stake in Iron Ore Company of Canada, which could fetch more than $1.7 billion.
Old Mutual advanced by 4.40 percent, after reporting and increased profit for the full year.
Advertising firm WPP Group reported higher pre-tax profit for the year, amid a strong performance in the emerging markets. The stock finished up by 0.38 percent.
Hammerson gained 2.45 percent, after reporting annual results and increasing its dividend.
William Hill surged by 9.54 percent. The company announced higher full year pre-tax profit as well as acquisition of 29 percent stake in William Hill Online.
Eurozone's manufacturing sector contracted at a slightly weaker pace than estimated earlier in February, final data released by Markit Economics showed Friday. The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector came in at 47.9 in February, which was unchanged from January's 11-month high. The latest reading was slightly higher than 47.8 seen in the preliminary estimates.
Eurozone inflation moved within the central bank's target for the first time since late 2010, while unemployment rose to an all time high, raising pressure on the European Central Bank to ease interest rates.
Inflation eased more-than-expected to 1.8 percent in February, the lowest since August 2010, from 2 percent in January, a flash estimate from Eurostat showed Friday. Final data is due on March 15. The rate was expected to slow to 1.9 percent. Inflation has moved into the ECB's 'below, but close to 2 percent' target.
Another report from Eurostat showed that the unemployment rate in the euro area rose to a record to 11.9 percent in January from an upwardly revised 11.8 percent in December. Economists had forecast the rate to rise to 11.8 percent from December's originally estimated 11.7 percent.
German retail sales in January recovered at the fastest pace in 6 years, suggesting that consumer spending bolstered domestic demand and economic rebound at the start of the year.
Real retail sales rose 3.1 percent in January from the previous month when they were down 2.1 percent, data from the Federal Statistical Office showed Friday. The 3.1 percent growth rate was the fastest pace since December 2006 and far exceeded the 0.9 percent increase forecast by economists.
Activity in the German manufacturing sector increased more than initially estimated in February, recovering from the modest decline seen in the previous month, survey data released by Markit Economics and BME showed Friday. The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector increased to 50.3 in February from 49.8 in January. The flash estimates were for an increase to 50.1.
French manufacturing downturn eased more than previously estimated in February, detailed results of a survey by Markit Economics revealed Friday. The purchasing managers' index rose to 43.9 in February from 42.9 in January. The latest score was slightly higher than the flash reading of 43.6.
The British manufacturing sector unexpectedly slipped back into contraction in February, for the first time in three months, after recoding growth in the previous months, latest data showed Friday.
The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector dropped to 47.9 in February from 50.5 in January, a survey by Markit Economics and the Chartered Institute of Purchasing and Logistics (CIPS) showed. Economists had forecast a reading of 51.
China's manufacturing growth moderated in February reflecting weak expansion in new orders, putting the economy under pressure again as it seeks to recover from nearly two-years of slowdown.
The official purchasing managers' index slipped to 50.1 in February from 50.4 in January, falling for a second consecutive month, a survey by China Federation of Logistics and Purchasing (CFLP) and the National Bureau of Statistics showed. Economists had forecast the index to rise to 50.5.
Personal income in the U.S. fell by more than anticipated in the month of January, according to a report released by the Commerce Department on Friday, with the sharp drop coming after a significant increase in December. The report said personal income tumbled by 3.6 percent in January after surging up by 2.6 percent in December. Economists had been expecting income to pull back by about 2.1 percent.
Despite the pullback in personal income, the report also showed that personal spending edged up by 0.2 percent in January after inching up by 0.1 percent in December. The increase in spending matched economists' expectations.
Economic activity in the U.S. manufacturing sector expanded for the third consecutive month in February, the Institute for Supply Management revealed in a report on Friday, with the index of activity in the sector unexpectedly rising to its highest level in over a year and a half.
The ISM said its purchasing managers' index rose to 54.2 in February from 53.1 in January, with a reading above 50 indicating growth in the manufacturing sector. Economists had been expecting the index to edge down to a reading of 52.8.
Consumer sentiment in the U.S. improved by even more than initially estimated in the month of February, according to a report released by Thomson Reuters and the University of Michigan on Friday. The report said the final reading on the consumer sentiment index for February came in at 77.6 compared to the mid-month reading of 76.3. Economists had expected the index to be downwardly revised to 76.0.
Construction spending in the U.S. unexpectedly showed a significant decrease in the month of January, according to a report released by the Commerce Department on Friday. The report said construction spending fell 2.1 percent to a seasonally adjusted annual rate of $883.3 billion in January from the revised December estimate of $902.6 billion.
The sharp drop in construction spending came as a surprise to economists, who had expected spending to increase by 0.6 percent.
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