EUROPEAN stocks fell on Thursday as mixed economic data spurred worries about global growth and offset gains in interest rate-sensitive sectors, with France’s CAC 40 leading national declines.
The pan-European Stoxx 600 index fell 0.5 per cent, with sectors tracking healthcare, chemicals and personal goods all falling over 1 per cent.
Economic worries continued to weigh on sentiment. German industrial orders rose more than expected in July, but euro zone retail sales slipped on an annual basis.
That, combined with some signs of weakening in the US labour market, kept investors cautious ahead of key US nonfarm payrolls data on Friday.
“The industrial orders were good news for Germany but everybody right now is focused on US job data … tension in the market is growing higher into tomorrow’s US job report which is why we see a continued sell off in the U.S. and European stock markets,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
France’s benchmark index slipped 0.9 per cent, its third consecutive loss, as worries about a slowdown in top consumer China weighed on luxury stocks.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
An index of luxury stocks dropped over 3 per cent, with LVMH and Hermes International slumping 3.6 per cent and 6.4 per cent, respectively.
The selection of Michel Barnier, the EU’s former Brexit negotiator, as France’s prime minister helped lift some bank stocks and government bonds in hopes it would soothe the country’s political turmoil since President Emmanuel Macron called a snap election in June.
“Having a Prime Minister is a good sign and it’s going to calm nerves in the market, but this period of (political) uncertainty has damaged investor appetite for France,” Ozkardeskaya said.
Germany’s benchmark DAX index was flat. The country’s Ifo Institute said the economy was likely to stagnate this year, in contrast to previous forecasts of 0.4 per cent growth.
The rate-sensitive utility and real estate sectors were the top gainers, both up over 1 per cent as investors continued to expect rate cuts this month from both the European Central Bank and the Federal Reserve.
Economists polled by Reuters expect the ECB to cut its deposit rate by 25 basis points on Sept 12 and again in December.
Among individual stocks, Airbus SE fell 1.4 per cent after Europe’s air safety regulator said it would call for inspections on at least part of its A350 fleet after an engine part failed during a Cathay Pacific flight.
Vistry surged 8.5 per cent as the British homebuilder said it would buy back shares worth £130 million following a 7 per cent rise in half-year earnings.
Technology shares broadly fell, extending their slide from the previous session, with ASML Holdings falling 2.2 per cent, tracking weakness in US semiconductor stocks. REUTERS
