Despite recovering from early lows and staying in positive territory till about a couple of hours past noon, European stocks drifted down and ended sharply lower on Friday.
A sell-off in technology stocks following another spell of weakness in the U.S. technology space was the significant reason for European markets‘ fall. None too encouraging data from Germany, continued Brexit concerns, and worries about coronavirus outweighed data showing notable addition of jobs and a drop in U.S. unemployment.
The pan European Stoxx 600 ended down 1.13%. The U.K.’s FTSE 100 lost 0.88%, France’s CAC 40 shed 0.89% and Germany’s DAX fell 1.65%, while Switzerland’s SMI declined 0.66%.
The FTSE 100 shed about 2.8% in the four-day week. The market was closed on Monday for a holiday. The DAX and CAC 40 lost 1.8% and 0.8%, respectively in the week.
Among other markets in Europe, Belgium, Denmark, Finland, Greece, Netherlands, Norway, Poland and Portugal ended with sharp to moderate losses.
Finland, Russia and Spain finished with modest losses. Iceland and Turkey closed on a firm note, while Austria, Czech Republic, Ireland and Sweden ended flat.
In the U.K. market, real estate stocks were weak amid news the UK’s competition regulator has begun an enforcement action against certain housebuilders.
Scottish Mortgage, Taylor Wimpey, Hiscox, Persimmon, Rightmove and Barratt Developments lost 3 to 6%. Land Securities, Prudential, Berkeley Group, Smiths, Vodafone, GlaxoSmithKline, British Land Company and Unilever also declined sharply.
On the other hand, Royal Bank, Carnival, Anglo American, Merlrose, JD Sports Fashion and Antofagasta gained 3 to 4%. TUI, EasyJet, Fresnillo, Hikma Pharma, Rio Tinto and Evraz ended higher by 2 to 2.8%.
In Germany, Vonovia plunged more than 7%. RWE shed about 4.4%, while SAP and E.ON lost more than 3% each.
Wirecard, Linde and Deutsche Telekom also declined sharply, while Covestro, Deutsche Bank and Lufthansa gained 2.7 to 3.5% and Thysenkrupp advanced 1.6%.
In the French market, WorldLine, Pernod Ricard, Dassault Systemes, Unibail Rodamco, Airbus Group, Veolia and STMicroElectronics slid 2 to 4%.
Societe Generale moved up 5.6%, while BNP Paribas and Credit Agricole gained 3% and 2.75%, respectively. Valeo surged up nearly 5%. Renault and Peugeot moved up 4.5% and 4.3%, respectively, while Accor and Carrefour gained 3.2% and 3%, respectively.
In Spain, bank stocks flared up on news CaixaBank and Bankia SA are exploring a merger to form the largest lender in the country. CaixaBank said that the deal would value the combined entity at 14 billion-euro.
CaixaBank shares ended nearly 12.5% up and Bankia shares soared more than 33%. Shares of other lenders Banco de Sabadell and Bankinter gained 12.8% and 5.3%, respectively. Banco Bilbao gained 5.2% and Banco Santander notched up about 2.5%.
In economic news, Germany’s factory orders growth moderated more than expected in July, data from Destatis revealed Friday. Factory orders increased 2.8% on a monthly basis, much slower than the 28.8% rise in June and economists’ forecast of 5%. On a yearly basis, overall factory orders declined 7.3% in July, following a 10.6% decrease seen in June.
Data showed that manufacturing turnover climbed 5.2% on month, but slower than the 13.2% increase in June.
According to survey data from IHS Markit, Germany’s construction sector moved closer to stabilization in August but the coronavirus pandemic remained a restraining factor on demand and expectations.
The headline construction Purchasing Managers’ Index rose to 48.0 in August from 47.1 in July. The score was the highest in six months in August.
The UK construction sector growth moderated in August from a near five-year high largely due to the lack of new work to replace completed contracts, survey results from IHS Markit showed. The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers’ Index fell unexpectedly to 54.6 in August from 58.1 in July. The score was forecast to climb to 58.5.
According to data from the Society of Motor Manufacturers and Traders, or SMMT, UK new car sales fell in August after a double-digit growth in the previous month, dropping by 5% year-on-year. In July, sales had grown 11.3%, which was the first expansion this year.
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