European Equity Benchmarks Close Mixed; Eurozone Growth Slows Again

The broad-based major European indices closed mixed in Thursday trading as investors favored automotive stocks and banks over health care sector equities.

In economic news, eurozone economic growth slowed for the second consecutive month in April, according to flash PMI survey data from IHS Markit, indicating that the economy remains in its worst growth spell in five years.

The IHS Markit Eurozone Composite PMI fell to 51.3 in April from 51.6 in March, according to the preliminary estimate, which was the third-lowest since November 2014. The flash PMI is typically based on around 85% of the final number of replies received each month.

IHS Markit said a solid service sector performance in Germany helped sustain the expansion and offset a sharp downturn in manufacturing, but that France stagnated, and the rest of the region saw the worst growth since late-2013.

"The data add to worries that the economy has failed to rebound with any conviction from one-off factors that dampened activity late last year," said Chris Williamson, IHS Markit's chief business economist, "and continues to show only very modest growth in the face of headwinds from slower global demand growth and subdued economic sentiment."

In the UK, retail sales increased 1.6% in Q1 compared with Q4 2018, following sustained growth throughout the first three months of the year, according to the Office for National Statistics (ONS). All store types except department stores and household goods stores increased in the quantity bought in the three months to March, when compared with the previous three months.

The monthly growth rate in the quantity bought in March increased 1.1%, with food stores and non-store retailing providing the largest contributions to this growth. Year-on-year growth in the quantity bought increased by 6.7% in March, the highest since October 2016 as milder weather helped boost sales in comparison to March 2018. Online sales as a proportion of all retailing increased to 18.6% in March, up from 18.1% in February.

In Germany, the index of producer prices for industrial products rose 2.4% in March compared with the same month last year, according to the Federal Statistical Office (Destatis). In February the annual rate of change all over had been 2.6%.

Compared with February, the overall index decreased 0.1% in March. Compared with March 2018, the price indices of all main industrial groups increased.

And in Italy, the seasonally adjusted turnover index increased 0.3% in February compared to the previous month, according to the Italian National Institute of Statistics (Istat). The seasonally adjusted industrial new orders index decreased 2.7% compared with January; the average of the last three months compared to the previous three months decreased 1.3%. Compared to the same month last year the calendar adjusted industrial turnover index increased 1.3% (+1.1% in domestic market and +1.6% in non-domestic market).

In equities, aerospace and defense firm BAE Systems, and Hikma Pharmaceuticals led the FTSE lower in London, falling 3.8% and 2.7% respectively, followed by medical equipment maker Smith & Nephew, and pharmaceutical firm AstraZeneca, which lost 1.9% and 1.7%. Cruise line operator Carnival dropped 1.5%, while health care company NMC Health, and pharmaceutical company GlaxoSmithKline lost 1.3% and 1.1%.

In Frankfurt, automaker Daimler, and real estate firm Vonovia led the DAX higher, rising 2.1% and 1.4% respectively, followed by airline operator Lufthansa, and postal services provider Deutsche Post, which climbed 1.3% each. Footwear and apparel company Adidas gained 1.2%, while automaker Volkswagen, and software firm SAP each closed 1.1% higher.

And in Paris, energy management firm Schneider Electric, and auto parts supplier Valeo led the CAC into positive territory, climbing 2.7% and 2.4% respectively, followed by public relations firm Publicis Groupe, and Legrand, which rose 1.5% each. Banks Credit Agricole and BNP Paribas were up 1.3% and 1.1% respectively, while IT firm Atos closed 1.3% higher.

The FTSE lost 0.15%, the DAX gained 0.57%, and the CAC-40 rose 0.31%.

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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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