European Equity Benchmarks Close Lower

The broad-based major European indices closed lower in Friday’s trading session, as financial stocks and mining companies weighed on the markets.

In economic news, Eurostat, the statistical office of the European Union, reported that for the euro area, (EA19) exports of goods to the rest of the world in July was EUR177.7 billion ($212.47 billion), an increase of 6.1% compared with July 2016 (EUR167.6 billion). Imports from the rest of the world stood at EUR154.6 billion, up 8.2% from July 2016 (EUR142.8 billion). As a result, the euro area recorded a EUR23.2 billion surplus in trade in goods with the rest of the world in July, compared with EUR24.8 billion in July 2016. Intra-euro area trade rose to EUR145.6 billion in July, up by 5.6% compared with July 2016.

Meanwhile, hourly labor costs rose 1.8% in the euro area, and by 2.2% in the EU28 in Q2, compared with the same quarter the previous year. In Q1, hourly labor costs increased 1.4% and 1.6% respectively. The highest annual increases in hourly labor costs for the whole economy were registered in Romania (+18.6%), Hungary (+13.0%), the Czech Republic (+11.1%), Bulgaria (+11.0%) and Lithuania (+10.4%). A decrease was reported in Finland (-0.3%).

Eurostat also said the job vacancy rate in the euro area was 1.9% in Q2, flat compared with the previous quarter, and up from 1.7% in Q2 of 2016. In the EU28, the job vacancy rate was 2.0% in Q2, up from 1.9% in Q1, and 1.8% during the same period last year. The highest job vacancy rates Q2 were in the Czech Republic (3.6%), Belgium (3.3%), Germany (2.7%), the Netherlands, Austria and the U.K. (all 2.6%), and Sweden (2.5%). The lowest rates were observed in Greece (0.7%), Bulgaria, Spain and Cyprus (all 0.8%), and Portugal (0.9%).

In France, wages and salaries in the non-agricultural market sector decelerated in Q2, rising 0.4% quarter on quarter, after gaining 0.7% in Q1, according to the Institute for Statistics and Economic Studies (INSEE). Year on year, it rose 1.7% in Q2, compared to a 1.5% increase in Q1.

In equities, cruise line operator Carnival (CCL, CUK) led the FTSE lower in London, falling 6.2%, followed by investment management firm Standard Life, and non-standard lender Provident Financial, which lost 3.8% and 3.7%. Mining companies also weighed down the market as Fresnillo and Antofagasta dropped 2.3% each, while Bhp Billiton and Glencore International were down 2.2% and 2% respectively.

In Frankfurt, Deutsche Bank (DB) and pharmaceutical company Bayer led the DAX into negative territory, falling 1.7% and 1.4%, respectively, followed by electricity and natural gas supplier RWE, which shed 1.1%. Bank Commerzbank, industrial company ThyssenKrupp, and pharmaceutical firm Merck each closed 0.8% lower.

And in Paris, steel and mining company ArcelorMittal (MT) led the CAC lower, falling 2.9%, followed by hotel operator Accor, and food processing company Danone, which dropped 1.3% and 1.2% respectively. Commercial real estate firm Unibail Rodamco, lost 1.1%, while electricity distributor Schneider Electric, and financial protection company Axa, were off 1% each. Banks Societe Generale and BNP Paribas lost 1% and 0.8%.

The FTSE dropped 1.10%, the DAX fell 0.17%, and the CAC-40 lost 0.22%.

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