European Equity Benchmarks Close Higher; Mining, Automotive, Bank Stocks Buoy Markets

The broad-based major European indices closed higher in Thursday trading as mining, automotive and bank stocks helped lift the markets into positive territory.

In economic news, eurozone retail sales edged higher in June, according to the IHS Markit Eurozone Retail PMI, which tracks changes in retail sales in the bloc's biggest three economies. The index was at 51.8 for the month, compared to 51.7 in May. IHS said the overall increase reflected strong growth in Germany, where monthly sales rose by the most since July 2015. In contrast, both France and Italy posted modest declines compared with May.

"The eurozone retail sector continued its recent solid run of growth in June," said Trevor Balchin, IHS Markit's economics director. "The three largest economies in the eurozone continued to show widely differing trends, however. Germany posted a 19th straight monthly increase in retail sales, and the strongest expansion in nearly three years. In contrast, Italian sales fell for the seventh time in eight months, albeit at a weaker pace. France registered a decline for the first time since March 2017."

The EU28 recorded a surplus of EUR63.9 billion ($74.8 billion), or 1.6% of GDP, in Q1, down from a surplus of EUR68.0 billion (1.8% of GDP) in Q4 of 2017, but up from a surplus of EUR43.9 billion (1.2% of GDP) in the same quarter last year, according to Eurostat, the statistical office of the European Union.

Based on non-seasonally adjusted data, the EU28 recorded external current account surpluses in Q1 with the US (+EUR60.8 billion), Switzerland (+EUR21.7 billion), Brazil (+EUR7.9 billion), Canada (+EUR7.2 billion), Hong Kong (+EUR6.5 billion) and India (+EUR0.1 billion). Deficits were registered with China (-EUR30.2 billion), Russia (-EUR12.3 billion), offshore financial centers (-EUR5.5 billion) and Japan (-EUR2.8 billion).

Eurostat also reported that the household saving rate in the euro area was 12% in Q1, compared with 12.2% in Q4 of 2017. The household investment rate in the euro area was 9.0% in Q1, compared with 8.9% in the previous quarter. Meanwhile, the business investment rate was 23.1% in the euro area in Q1, compared with 22.9% in the previous quarter. The business profit share in the euro area was 40.6% in Q1, compared with 40.8% in Q4 of 2017.

In Germany, the Federal Statistical Office (Destatis) reported that price-adjusted new orders in manufacturing increased a seasonally and calendar adjusted 2.6% in May compared to the previous month. Price-adjusted new orders without major orders in manufacturing had increased a seasonally and calendar adjusted 2.2% on the previous month.

Domestic orders increased 4.3%, and foreign orders increased 1.6% in May from April. New orders from the euro area were up 6.7%, while new orders from other countries decreased 1.3% compared to April. The manufacturers of intermediate goods saw new orders fall 0.6% during the month compared with April. The manufacturers of capital goods showed increases of 4.7% on the previous month, while a 4.9%increase in new orders of consumer goods was recorded.

In equities, mining stocks helped lift the FTSE into positive territory in London as Evraz, Anglo American, and Glencore climbed 3%, 2.8%, and 2.1% respectively. while Rio Tinto, BHP Billiton, and Fresnillo were up 1.8%, 1.7%, and 1.3%. Online food ordering company Just Eat, turnaround firm Melrose Industries, and chemicals company Croda International each closed 1.8% higher.

In Frankfurt, automobile manufacturers Volkswagen, Daimler, and BMW helped boost the DAX, rising 4.1%, 3.8%, and 3.7% respectively, while tire maker continental closed 2.7% higher. Industrial gases company Linde led all gainers, climbing 4.5%, while Commerzbank and Deutsche Bank were up 2.2% and 2.1% respectively.

In Paris, automotive and bank stocks also helped boost the CAC sharply higher, as auto parts supplier Valeo rose 4.1%, while automakers Peugeot and Renault were up 3.5% and 2.9%, while tire maker Michelin also closed 2.9% higher. Bank BNP Paribas was up 1.8%, while fellow banks Societe Generale rose 1.2% and Credit Agricole closed 1.4% higher.

The FTSE gained 0.40%, the DAX climbed 1.19%, and the CAC-40 rose 0.86%.

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

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.

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

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.