European Equity Benchmarks Close Lower; Euro Area Inflation Falls to 1.6%

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The broad-based major European indices closed lower in Thursday trading as financial companies and automotive stocks weighed down the markets.

In economic news, the euro area annual inflation rate was 1.6% in December, down from 1.9% in November, but up from 1.4% at the same time the previous year, according to Eurostat, the statistical office of the European Union. European Union annual inflation was 1.7% in December, down from 2.0% in November, and unchanged from a year earlier.

The lowest annual rates were registered in Greece and Portugal (both 0.6%) and Denmark (0.7%), while the highest annual rates were recorded in Estonia (3.3%), Romania (3.0%) and Hungary (2.8%). Compared with November, annual inflation fell in 22 member states, remained stable in three, and rose in three. In December, the highest contribution to the annual euro area inflation rate came from services, followed by energy, food, alcohol & tobacco, and non-energy industrial goods.

Eurostat also reported that seasonally adjusted production in the construction sector decreased 0.1% in the euro area (EA19) in November compared with October, while it increased 0.2% in the EU28. In October, production in construction fell 1.6% in the euro area and 1.1% in the EU28. In November compared with November 2017, production in construction increased 0.9% in the euro area and 1.8% in the EU28.

The highest monthly decreases in production in construction were observed in Czechia (-3.6%), Germany (-1.7%) and Portugal (-1.5%), while the largest monthly increases were reported in Hungary and Slovenia (both +4.4%) and France (+1.5%). The highest annual increases in production in construction were in Hungary (+27.3%), Slovenia (+18.9%) and Poland (+16.0%), and the largest annual decreases were in Romania (-4.8%), Sweden (-2.6%) and Germany


In the UK, General government gross debt was GBP1.764 trillion ($2.28 trillion) at the end of the financial year ending March 2018, equivalent to 85.4% of gross domestic product ( GDP ), according to the Office for National Statistics (ONS).

In Germany, the price adjusted stock of orders in manufacturing in November rose a seasonally and calendar adjusted 1.1% on the previous month, according to the Federal Statistical Office (Destatis). The domestic orders not yet completed increased 0.8% on the previous month, while the stock of foreign orders rose 1.3%. The stock of orders comprises the total of new orders received by the end of the reference month which have not led to any turnover and have not been cancelled by that time.

And in France, the price of North Sea crude oil (Brent) in euros kept decreasing, falling 12.0% after tumbling 19.3% in November to an average of EUR50 ($57) per barrel in December, according to the Institute for Statistics and Economic Studies (INSEE). In dollars, the decrease was of almost the same magnitude, falling 12.3% after a 20.1% drop the previous month.

In equities, TV broadcaster ITV, and energy services firm John Wood Group led the FTSE lower in London falling 5.9% and 4.7% respectively, followed by SEE, which lost 3.3%. Investment manager Standard Life Aberdeen dropped 2.8%, while private equity firm 3i Group, and automaker Rolls Royce each closed 2.5% lower. RSA Insurance Group, and financial services company Hargreaves Lansdown were down 2.4% and 2.2% respectively, while health care company NMC Health was off 2.1%.

In Frankfurt, automotive stocks helped push the DAX into negative territory as automakers Daimler, Volkswagen, and BMW fell 1.8% 1.4%, and 0.4% respectively, while tire maker Continental was off 0.9%. Deutsche Bank led all decliners, losing 4.1%, while semiconductor company Infineon, and pharmaceutical firm Bayer dropped 2.2% and 1.4%.

And in Paris, banks led the CAC lower as Societe Generale, BNP Paribas, and Credit Agricole fell 5.7%, 3.9%, and 1.9% respectively. Semiconductor company STMicroelectronics lost 1.8%, while automakers Renault and Peugeot were off 1.3% and 1.1%. Luxury goods company Louis Vuitton shed 1%, while airplane manufacturer Airbus Group, and pharmaceutical company Sanofi each closed 0.8% lower.

The FTSE fell 0.40%, the DAX lost 0.12%, and the CAC-40 dropped 0.34%.

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 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.

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