European Equity Benchmarks Lower; Automotive, Mining Stocks Burden Markets

The broad-based major European indices closed lower in Tuesday trading as automotive and mining stocks weighed down the markets.

In economic news, a new study published by the European Commission highlights the increasing importance of EU exports for job opportunities in Europe. The report said that EU exports to the world are more important than ever, supporting 36 million jobs across Europe that are on average 12% higher paid than jobs in the rest of the economy. It also said that since 2014, the number of jobs supported by exports has increased by 3.5 million.

"This study makes it crystal clear that trade means jobs," said Commissioner for Trade Cecilia Malmström. "Exports from the EU to the world support the livelihoods of a vast, and increasing, number of citizens in every corner of Europe. EU trade also supports millions of jobs far beyond EU borders, including in developing countries. So here's even more proof that trade can be a win-win: what's good for us is also good for our partners around the world."

Meanwhile Eurostat, the statistical office of the European Union, reported that average household electricity prices in the EU in the first half of 2018 were stable compared with the first half of 2017, standing at EUR20 per 100 kWh. Average gas prices in the EU were also stable and stood at EUR6 per 100 kWh in the first half of 2018. Taxes and levies accounted for 37% of the electricity bills charged to households in the EU in the first half of 2018. For gas bills the corresponding share was 27 %.

The largest decline in electricity prices was in Poland, while the highest increase was in Romania. Between the first half of 2017 and the first half of 2018, the largest decreases in household electricity prices, in national currencies, were in Poland (-4.3%) and Greece (-3.6%), followed by Latvia (-3.5%), Malta and Germany (both -3.2%). And the largest increases were registered in Romania (+14.1%), Estonia (+11.7%), the Netherlands, and Croatia (both +9.2%).

The largest decline in gas prices was in Estonia, while the highest increase was in Bulgaria. Between the first half of 2017 and the first half of 2018, the largest decreases in household gas prices, in national currencies, were reported in Estonia (-4.3%), Portugal (-1.8%) and Luxembourg (-1.7%), while the largest increases were in Bulgaria (+14.9%), Lithuania (+9.3%), and the Netherlands (+6.8%).

In the UK, the number of registered businesses in Great Britain trading internationally was estimated at 340,500 in 2017, according to the Office for National Statistics ( ONS ), which represented 14.3% of the total number of businesses in the Great Britain non-financial economy. This was up from 13.7% in 2016.

In France, households' confidence in the economic situation strongly declined in November, according to the Institute for Statistics and Economic Studies (INSEE). INSEE said the synthetic index measuring household confidence has fallen 3 points during the month to 92, its lowest level since February 2015, and well below its long term average (100).

And in Italy, the consumer confidence index fell in November to 114.8 from 116.5, according to the Italian National Institute of Statistics (Istat), while the composite business confidence climate index dropped to 101.1 from 102.5.

In equities, mining stocks weighed down the FTSE in London, led by Antofagasta, Evraz and Randgold Resources fell 3.4%, 3.3%, and 3.2% respectively. Chemicals company Johnson Matthey and online gambling company GVC Holdings, led all decliners, losing 4.1% and 3.8%, while home builder Persimmon, and travel company TUI dropped 2.7% and 2.5%.

In Frankfurt, automotive stocks led the DAX into negative territory, as automakers Volkswagen, Daimler, and BMW fell 4.0%, 2.4%, and 13% respectively, while tire maker Continental lost 3.4%. Internet company Wirecard dropped 3.8%, while industrial gases company Linde, airline operator Lufthansa, and chemicals company BASF were off 2.6%, 1.5%, and 1.4% respectively.

In Paris, automotive stocks also burdened the CAC, as auto parts supplier Valeo, and tire maker Michelin fell 5.3% and 3.9% respectively, while automakers Renault dropped 0.8%. Steel and mining company ArcelorMittal was down 3.6%, while luxury goods company Hermes International, and ophthalmic company EssilorLuxottica lost 1.8% and 1.5%. Industrial gases company Air Liquide, and energy management firm Schneider Electric each closed 1% lower.

The FTSE fell 0.27%, the DAX dropped 0.40%, and the CAC-40 lost 0.24%.

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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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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