European Equity Benchmarks Close Lower; Mining, Auto, Bank Stocks Burden Markets

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The broad-based major European indices closed sharply lower in Friday trading as mining, automotive, and bank stocks weighed down the markets

In economic news, gross domestic product ( GDP ) in volume terms in the UK was estimated to have increased 0.4% between Q1 and Q2, according to the Office for National Statistics ( ONS ). The services industries, and construction increased 0.5% and 0.9% respectively in Q2, while production decreased 0.8%.

Household spending grew by 0.3% and business investment increased by 0.5% between Q 1 and Q2. The trade deficit widened by GBP4.7 billion ($6 billion) in Q2 (in current price terms), with net trade dragging on GDP growth as a result. Growth in compensation of employees slowed in Q2 to 0.6%, but continued to contribute positively to GDP growth, said the ONS.

The ONS also reported that In Q2, the index of production fell 0.8% compared with Q1 due to a fall of 0.9% in manufacturing, and a drop in energy supply of 2.7%. In June, total production was estimated to have increased 0.4% compared with May, due to increases in manufacturing of 0.4% and water and waste of 1.6%.

In Germany, the Federal Statistical Office (Destatis) reported that turnover in the main construction industry in May rose 1.9% compared with the same month the previous year. At the end of May, the number of persons employed by main construction industry entrepreneurs was up 2.4% compared to a year earlier.

In France, output bounced back in the manufacturing industry in June, rising 0.6% after dropping 0.5% in May, according to the Institute for Statistics and Economic Studies (INSEE). It also picked up in the whole industry, gaining 0.6% after losing 0.2% the previous month.

In equities, mining stocks led the FTSE into negative territory as Evraz shed 9%, while Randgold Resources, Fresnillo, Glencore, and Anglo American lost 3.5%, 3.2%, 2.7%, and 2.6% respectively. Beverage distributor Coca-Cola HBC was down 4.1%, while bookmaker company Paddy Power Betfair, and engineering company Rolls Royce were off 3.9% ad 3.7%.

In Frankfurt, Deutsche Bank and Commerzbank led the DAX sharply lower, falling 4.1% and 3.5% respectively. Automotive stocks also weighed down the market as automakers Daimler, Volkswagen, and BMW fell 3.1%, 2.3%, and 1.5% respectively, while tire maker Continental dropped 1.3%.

In Paris, banks burdened the CAC as BNP Paribas, Societe Generale, and Credit Agricole fell 3%, 2.5%, and 2.1% respectively. Semiconductor company STMicroelectronics, steel and mining firm ArcelorMittal were off 4.9% and 2.9% respectively, while cosmetics company L'Oreal closed 2.6% lower.

The FTSE lost 0.97%, the DAX fell 1.99%, and the CAC-40 dropped 1.59%.

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: GDP , ONS , DAX

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