European Equity Benchmarks Close Mixed; Euro Area Inflation Falls to Lowest in 8 Years

The broad-based major European indices closed mixed in Wednesday's trading session, as mining and automotive stocks weighed down the London and Paris exchanges respectively, while utilities and pharmaceuticals boosted the German market.

In economic news, euro area annual inflation is expected to be 1.4% in May, down from 1.9% in April, according to Eurostat, the statistical office of the European Union. Among the main components of inflation, energy is expected to have the highest annual rate in May (4.6%, compared with 7.6% in April), followed by food, alcohol and tobacco (1.5%, stable compared with April), services (1.3%, compared with 1.8% in April) and non-energy industrial goods (0.3%, stable compared with April).

Eurostat also reported that the unemployment rate was 9.3% in April in the euro area (EA19), down from 9.4% in March, and down from 10.2% in April of 2016. It is the lowest rate recorded in the euro area since March 2009. The unemployment rate was 7.8% in April in EU28, down from 7.9% in March, and from 8.7% in April of last year. It is the lowest rate recorded in the EU28 since December 2008.

The lowest unemployment rates in April were in the Czech Republic (3.2%), Germany (3.9%) and Malta (4.1%), while the highest unemployment rates were reported in Greece (23.2% in February 2017) and Spain (17.8%).

In Germany, the Federal Statistical Office (Destatis) reported that in April, an estimated 43.9 million Germany residents were in employment, up 655,000, or 1.5%, from April of 2016. From January to March, the year-on-year growth rate was also 1.5%. Meanwhile, in April there were an estimated 1.8 million unemployed, 6,000 more than a year earlier.

In equities, mining stocks weighed down the FTSE in London as Rio Tinto, and BHP Billiton each lost 2.5%, while Glencore International, and Anglo American dropped 2.4% and 2.3% respectively. Payment processing company Worldpay Group fell 1.8%, while insurance firm Old Mutual, and broadcaster ITV were down 1.6% each.

In Frankfurt, electricity and gas providers E.ON and RWE led the DAX higher, rising 2.9% and 2.5% each. Kidney dialysis company Fresenius Medical Care was up 2.7%, while pharmaceutical firms Merck and Bayer gained 1.7% and 1.4% each. Postal services provider Deutsche Post, and bank Commerzbank increased 2.2% and 1.4% respectively.

And in Paris, automotive stocks burdened the CAC as tire maker Continental, and automaker Renault fell 2.7% and 2.2%, while auto parts supplier Valeo and car maker Peugeot each dropped 1.8%. Bank Societe Generale, and steel company ArcelorMittal led all decliners closing 4.8% and 2.9% lower respectively.

The FTSE fell 0.09%, the DAX gained 0.13%, and the CAC-40 lost 0.42%.

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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