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European Equity Benchmarks Lower; Airlines, Mining Stocks, Healthcare Firms Fall

The broad-based major European indices closed lower in Wednesday's trading session, as airlines, mining stocks, and health care companies led the markets into negative territory.

In economic news, house prices rose 4.2% in the euro area, and 4.5% in the EU in Q4 of 2017, compared with the same quarter of the previous year, reported Eurostat, the statistical office of the European Union. Compared with Q3 of 2017, house prices increased 0.9% in the euro area, and 0.7% in the EU in Q4 of 2017.

The highest annual increases in house prices in Q4 of 2017 were in Ireland (+11.8%), Portugal (+10.5%) and Slovenia (+10.0%), while prices fell in Italy (-0.3%). Compared with the previous quarter, the highest increases were in Slovenia (+3.7%), Croatia (+3.2%) and Cyprus (+2.7%), while decreases were seen in Sweden (-2.8%), Denmark (-1.7%), Belgium (-0.4%), and Finland (-0.3%).

The total UK trade deficit (goods and services) widened by GBP400 million ($567.2 million) to GBP6.4 billion in the three months to February 2018; excluding erratic commodities it widened by GBP1 billion to GBP7.5 billion, according to the Office for National Statistics ( ONS ). This is a relatively small movement in the UK trade balance, which during the past 12 months has ranged from a GBP2.8 billion narrowing in the three months to October 2017, and a GBP3.2 billion widening in the three months to January, said the ONS.

The widening of the total trade deficit was due mainly to a GBP2.1 billion fall in non-EU goods exports, partially offset by increases in EU goods and in total services exports in the three months to February. Goods and services both contributed to the widening of the trade deficit in the three months to February. The UK's surplus in services narrowed by GBP300 million to GBP27.8 billion, while the deficit in goods widened by GBP100 million to GBP34.2 billion.

"Manufacturing continued to grow in the three months to February but at the slowest rate seen since the summer, with increases in machinery, metal products and pharmaceuticals offset by falls in electrical appliances and oil refining," said Darren Morgan, ONS' head of national accounts said in a release. "This drop in refining may have contributed to the fall in fuel exports and the large rise in fuel imports also seen in the three months to February."

The ONS also reported that in the three months to February, the Index of Production decreased by 0.1% compared with the three months to November 2017, due to a fall of 8.6% in mining and quarrying, caused mainly by the shutdown of the Forties oil pipeline within December 2017. In the three months to February 2018, manufacturing provided the largest upward contribution to total production with an increase of 0.6%.

In February, compared with January, manufacturing declined by 0.2%, the first time output has fallen since March 2017. Economists had expected a 0.2% increase in industrial and manufacturing output in February, according to the BBC.

"Manufacturing continued to grow in the three months to February but at the slowest rate seen since the summer," said Morgan. "This drop in refining may have contributed to the fall in fuel exports and the large rise in fuel imports also seen in the three months to February."

In Germany, the core and extra budgets of the overall public budget, as defined in public finance statistics, recorded a financial surplus for the fourth time in a row, according to The Federal Statistical Office (Destatis). The surplus was particularly high in 2017, at EUR61.9 billion ($76.7 billion), while in the preceding year, the financial balance amounted to EUR25.8 billion. The financial balance of the core and extra budgets of the overall public budget has been positive since 2014, and reached an unprecedented peak in 2017, reported Destatis.

In equities, bottling company Coca Cola HBC led the FTSE lower in London, falling 4.4%, followed by energy firm Centrica, and cruise line operator Carnival, which were off 2.6% and 2.2% respectively. Airline operators International Consolidated Airlines Group and easyJet moved 1.9% and 1.8% lower, while private health care provider NMC Health, and biotech firm Shire lost 1.8% and 1.7% respectively. Mining stocks Glencore International and Anglo American also weighed down the market, declining 1.2% each.

In Frankfurt, plastics manufacturer Covestro, and bank Commerzbank weighed down the DAX, falling 2.8% and 2.7%, while stock market operator Deutsche Boerse, and airline operator Deutsche Lufthansa each closed 2.6% lower. Construction materials supplier HeidelbergCement, and health care company Fresenius were dow 2.2% and 2.1%, while reinsurance company Munich Re, and kidney dialysis company Fresenius Medical Care each declined 1.8%.

In Paris, airplane manufacturer Airbus led the CAC lower, falling 3.1%, followed by automaker Renault, and environmental management services provider Veolia Environnement, which dropped 2.8% and 2.5% respectively. Ophthlamic optics company Essilor International, facilities management company Sodexo, electricity provider Schneider Electric, tire maker Michelin, and media company Vivendi each closed 1.4% lower. Automaker Peugeot, semiconductor company STMicroelectronics, and steel and mining firm ArcelorMittal each lost 1.3%.

The FTSE lost 0.13%, the DAX fell 0.83%, and the CAC-40 dropped 0.56%.

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 MTNewswires.com. 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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