European Equity Benchmarks Close Mixed; Investors Favor Mining Stocks, Sell Banks

The broad-based major European indices closed mixed in Thursday trading as the London exchange moved higher, while the Frankfurt and Paris markets ended the session in negative territory.

In economic news, the Bank of England's Monetary Policy Committee ( MPC ) voted unanimously to maintain the bank rate at 0.75%. The committee also voted unanimously to maintain the stock of corporate bond purchases and UK government bond purchases at GBP10 billion ($13.14 billion).

The MPC said that since its previous meeting, the news in economic data has been mixed, but the MPC's February Inflation Report projections appear on track.

"The broad-based softening in global GDP and trade growth has continued," said the Bank. "Global financial conditions have eased, in part supported by announcements of more accommodative policies in some major economies."

The bank also said that shifting expectations about Brexit have continued to generate volatility in UK asset prices, particularly the sterling exchange rate. Brexit uncertainties also continue to weigh on confidence and short-term economic activity, notably business investment. However, it also said that short-term economic data may provide less of a signal than usual about the medium-term growth outlook.

Meanwhile, the UK's Office for National Statistics (ONS) reported that the monthly retail sales increased 0.4% in February, with a decline of 1.2% in food stores offset by growth in all other main sectors. The drop in food stores was the strongest decline since December 2016 at negative 1.5%, compared with an increase of 0.9% in January. Online sales as a proportion of all retailing fell to 17.6% in February from 18.8% in January, but were up 9.4% when compared with February 2018.

In Germany, the public budgets and the private sector (businesses, non-profit institutions, households and the non-domestic sector) spent a total of EUR295.1 billion ($334.8 billion) on education, science and research in 2017, according to the Federal Statistical Office (Destatis). This was an increase of EUR11.9 billion, or 4.2%, compared with the previous year. The expenditure accounted for 9.0% of the German gross domestic product.

Destatis also reported that China was the most important country for imports to Germany for the fourth consecutive year, as goods worth EUR106.3 billion were imported from China to Germany in 2018, a 4.4% increase from a year earlier.

In equities, health care and mining stocks helped boost the FTSE in London as pharmaceutical firms Hikma Pharmaceuticals, GlaxoSmithKline, and AstraZeneca climbed 7%, 2.7%, and 1.9% respectively, while medical equipment maker Smith & Nephew rose 2.1%. Mining company Fresnillo gained 4%, while Antofagasta and Rio Tinto were up 2% and 1.9%.

In Frankfurt, internet company Wirecard and Deutsche Bank led the DAX lower, falling 5.6% and 4.1% respectively, followed by stock market operator Deutsche Borse, and pharmaceutical company Bayer, which lost 3% and 2.7%. Health care company Fresenius, and postal services provider Deutsche Post were down 2.5% and 2% respectively, while airline operator Lufthansa closed 1.8% lower.

In Paris, bank stocks helped weigh down the CAC, as BNP Paribas, Societe Generale, and Credit Agricole fell 2.6%, 2.4%, and 1.7% respectively. Eyewear company EssilorLuxottica led all decliners dropping 6.6%, while facilities management services provider Sodexo, and auto maker Renault were off 2.6% and 1.3%.

The FTSE rose 0.88%, the DAX fell 0.46%, and the CAC-40 lost 0.07%.

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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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