Markets

European Markets Close Lower As U.S.-China Tensions, Growth Worries Hurt Sentiment

(RTTNews) - European markets ended notably lower on Friday as rising tensions between the U.S. and China and worries about global economic outlook due to the impact of the coronavirus pandemic triggered fairly heavy selling at several counters from across various sectors.

The continued uncertainty about trade talks between the U.K. and the European Union weighed as well.

Just days after the U.S. government ordered China to close its consulate in Houston, Texas, China announced the closure of the U.S. consulate in Chengdu, saying it was a "legitimate and necessary response to the unreasonable actions of the United States."

The pan European Stoxx 600 slid 1.7%. The U.K.'s FTSE 100 tumbled 1.41%, Germany's DAX shed 2.02% and France's CAC 40 declined 1.54%, while Switzerland's SMI plummeted 1.63%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain and Sweden ended with sharp to moderate losses, while Russia and Turkey closed higher.

In the U.K. market, Vodafone shares plunged sharply after the company reported a slight fall in first-quarter revenue and said its mobile towers business will be spun-off via an initial public offer in Frankfurt early next year.

M&G, Ocado Group, Prudential, JD Sports Fashion, IAG, EasyJet, Smith & Nephew, Royal Bank, Melrose, TUI, Scottish Mortgage and Reckitt Benckiser lost 3 to 6%. Standard Chartered, Burberry Group, Barratt Developments, Antofagasta and British Land Company also declined sharply.

On the other hand, Centrica soared more than 16% after the company announced a deal to sell its North American business Direct Energy to NRG Energy for $3.63 billion.

Johnson Matthey, Ferguson, Morrison Supermarkets, Tesco, Carnival and Wirecard ended with notable gains.

In France, Dassault Systemes Group and Worldline plunged 5.2% and 5%, respectively. Valeo, Vivendi, STMicroElectronics, Michelin, Sanofi, Saint Gobain, Capgemini, Societe Generale, Peugeot, ArcelorMittal and Airbus Group lost 2 to 4%.

Publicis Groupe and Technip moved higher by 3.6% and 2.8%, respectively.

In the German market, Wirecard declined 4.2%, while Fresenius Medical Care, Lufthansa, SAP, Fresenius, RWE, Volkswagen and Daimler ended lower by 2 to 3.75%.

In economic news, UK consumer confidence remained unchanged at lower level in July, final data from market research group GfK showed. The data said the consumer confidence index came in at -27 in July, unchanged from flash estimate but above from June's score of -30.

A report from the Office for National Statistics said UK retail sales logged a double-digit growth in June as non-food and fuel stores continued their recovery from the sharp falls experienced since the start of the coronavirus pandemic. Retail sales volume advanced 13.9% on month, faster than the 12.3% rise in May and bigger than economists' forecast of 8%.

On a yearly basis, retail sales volume dropped at a slower pace of 1.6% after easing 12.9% in May. Economists had expected a 6.4% drop for June.

Survey data from IHS Markit showed France's private sector expanded at the fastest pace in two-and-a-half-years in July driven by a sharp increase in services activity. The composite output index climbed to 57.6 from 51.7 in June. The reading was also above economists' forecast of 53.5. Any reading above 50 indicates expansion.

The services Purchasing Managers' Index came in at a 30-month high of 57.8 in July, up from 50.7 in June, above the expected level of 52.3, while the factory PMI fell unexpectedly to 52.0 from 52.3 in June, falling shot of an expected reading of 53.2.

The euro area private sector grew at the fastest pace in just over two years in July due to the relaxation of the coronavirus containment measures, flash survey data from IHS Markit showed. The composite output index rose to a 25-month high of 54.8 from 48.5 in June. This was also above economists' forecast of 51.1.

The flash services Purchasing Managers' Index advanced to 55.1 from 48.3 in June. The expected reading was 51.0. The flash manufacturing PMI came in at 51.1 versus 47.4 in June and forecast of 50.0.

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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