European Equity Benchmarks Close Mixed; UK GDP Growth Revised Lower

A generic image of a line graph
Credit: Shutterstock photo

The broad-based major European indices closed mixed in Thursday's trading session, as the continental markets moved lower, while the UK exchange ended the day in positive territory.

In economic news, the UK's Office for National Statistics ( ONS ) revised down its Q4 GDP figures to 0.4% from its preliminary estimate of 0.5%. The ONS said the revision in part reflects a small downward revision to the estimated output of the production industries. The ONS said growth in Q4 of 2017 was driven by business services and finance within the services sector.

Business investment growth was unchanged in Q4 from Q3, but grew 2.1% compared with the same quarter a year ago. GDP was estimated to have increased by 1.7% between 2016 and 2017, a downward revision of 0.1 percentage points from the preliminary estimate, and just below the 1.9% growth reported between 2015 and 2016.

In France, the Consumer Prices Index ( CPI ) edged down by 0.1% in January, following a 0.3% rebound in December, according to the Institute for Statistics and Economic Studies (INSEE). The decline was mainly attributed to the result of a seasonal downturn in manufactured product prices due to winter sales, and a drop in transport prices, while tobacco prices also fell. The monthly downturn was mitigated by a sharp acceleration in energy prices and a rise in food prices.

Consumer prices rose by 1.3% for the year in January after gaining 1.2% in November and December. The acceleration in energy and services prices was partly offset by slower prices of tobacco and food products, while prices of manufactured products were stable. Meanwhile, the core inflation index (ISJ) rose by 0.6% after being flat in December. Year on year, core inflation accelerated to 0.9%, after rising 0.6% in the previous month. The Harmonised Index of Consumer Prices (HICP) fell 0.1% after a rebound to 0.4% in December, and year on year it accelerated to 1.5%, after rising 1.2% the previous month.

INSEE also reported the business climate is slightly less favorable in February than in January. The composite indicator, compiled from the answers of business managers in the main sectors, has lost two points after a slight dip in January. However, INSEE said that at 109, it is still well above its long-term mean of 100. The business climate lost three points in services, two points in manufacturing industry, and one point in building construction. It is stable in retail trade.

Eurostat, the statistical office of the European Union, reported that total financial assets of households in the European Union (EU) reached EUR33.850 billion ($41.74 billion) in 2016. The assets mainly consisted of insurance, pensions, and standardized guarantees (38.8% of all household financial assets), currency and deposits (30.4%), and equity and investment fund shares (25.2%).

Financial liabilities totaled EUR10 113 billion in 2016, with loans making up more than 90% of the households' total financial liabilities. Most of them were taken for house purchases.

Eurostat said that the impact of the financial crisis is more evident in total financial assets of the EU households, which decreased from 213% of GDP in 2006 to 182% in 2008, before a recovery to 205% in 2009, and a subsequent steady rise to almost 230% of GDP in 2016. This demonstrated that the financial assets of households in the EU were slightly higher in GDP terms in 2016 than before the crisis.

In equities, home builder Barratt Developments, and aerospace company BAE Systems led the FTSE lower in London, falling 2.8% and 2.7% respectively, followed by bank HSBC, which was off 2.6%. Tobacco and consumer goods company British American Tobacco, and tourism company TUI each closed 2.2% lower, while tobacco company Imperial Brands Group, and home improvement retailer Kingfisher dropped 2.1% and 1.9%.

In Frankfurt, telecommunications provider Deutsche Telekom, and construction materials supplier HeidelbergCement helped nudge the DAX into negative territory, falling 2.4% and 1.3% respectively, followed by Deutsche Bank and industrial gases company Linde each closed 1% lower. Beiersdorf, a chemicals and consumer goods company, and bank Commerzbank each lost 0.8%, while reinsurance firm Munich Re was off 0.6%.

In Paris, oilfield services company TechnipFMC led the CAC higher, rising 3.9%, followed by environmental management services provider Veolia Environnement, which climbed 2.1%. Industrial gases company Air Liquide, automakers Peugeot and Renault, natural gas and electricity supplier Engie, and food company Danone each closed 0.9% higher.

The FTSE fell 0.40%, the DAX lost 0.07%, and the CAC-40 gained 0.13%.

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.

In This Story


Other Topics


Latest Markets Videos