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European stocks slip lower as World Bank cuts forecast; Dax down 0.40%

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Investing.com -

Investing.com - European stocks slipped lower on Wednesday, after the World Bank cut its global growth forecasts and as the yield gap between euro zone and U.S. government bonds continued to widen.

During European morning trade, the DJ Euro Stoxx 50 slipped 0.22%, France's CAC 40 declined 0.47%, while Germany's DAX retreated 0.40%.

Late Tuesday, the World Bank said tensions in Ukraine and bad weather in the U.S. weighed on global economic expansion in the first half of 2014 and estimated the global economy would grow 2.8% this year, down from a previous forecast of 3.2% made in January.

Borrowing costs in the euro zone have fallen in recent sessions due to the diverging monetary policy stance between the European Central Bank and the Federal Reserve. The yield on the U.S. 10-year Treasury note rose to 2.64% on Tuesday, its highest in a month.

Financial stocks were broadly lower, as French lenders Societe Generale (PARIS:SOGN) and BNP Paribas (PARIS:BNPP) tumbled 1.02% and 1.13%, while Germany's Deutsche Bank (XETRA:DBKGn) declined 0.50%.

Among peripheral lenders however, Italy's Unicredit (MILAN:CRDI) and Intesa Sanpaolo (MILAN:ISP) retreated 0.66% and 0.96% respectively, while Spanish banks Banco Santander (MADRID:SAN) and BBVA (MADRID:BBVA) slid 0.37% and 0.55%.

Elsewhere, Airbus Group (PARIS:AIR) plummeted 3.51% after saying said Emirates canceled its entire order for A350 aircraft valued at $16 billion. The Dubai-based carrier had announced the deal in 2007 and the airliners were due for delivery from 2019.

Vallourec (PARIS:VLLP) added to losses, diving 11.73%, as the French producer of steel pipes said 2014 earnings will be about 10% lower than the previous year because of a reduction in orders from Petroleo Brasileiro.

In London, FTSE 100 fell 0.26%, weighed by losses in Rolls-Royce Holdings (LONDON:RR), down 2.14%, after saying Emirates' cancellation reduces its order book by about £2.6 billion.

Meanwhile, financial stocks were mixed. Shares in HSBC Holdings (LONDON:HSBA) slipped 0.22% and Barclays (LONDON:BARC) tumbled 1.01%, while Lloyds Banking (LONDON:LLOY) and the Royal Bank of Scotland (LONDON:RBS) edged up 0.07% and 0.12% respectively.

In the mining sector, stocks were also mixed. Glencore Xstrata (LONDON:GLEN) rose 0.26% and Antofagasta (LONDON:ANTO) gained 0.68%, while Rio Tinto (LONDON:RIO) slipped 0.11% and Vedanta Resources (LONDON:VED) shed 0.35%.

On the upside, J Sainsbury (LONDON:SBRY) rallied 2.40% even after reporting the second straight drop in same-store sales after nine years of growth. Sales at stores open at least a year dropped 1.1%, excluding gasoline, in the 12 weeks ending June 7, the company said.

In the U.S., equity markets pointed to a lower open. The Dow 30futures pointed to a 0.12% loss, S&P 500futures signaled a 0.15% decline, while the Nasdaq 100futures indicated a 0.11% fall.

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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.


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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