Major European Markets Close Weak

The major European markets closed lower on Friday, despite coming off the day’s lows, as investors reacted to a slew of earnings announcements and economic data.

A somewhat sluggish trend in global markets amid some uncertainty about the pace of economic global economic recovery due to the resurgence in coronavirus cases in India and Japan and possibility of fresh restrictions on movements rendered the mood cautious.

Reports that the Biden administration might consider hiking capital gains tax on those who earn more than US$ 1 million per year weighed as well.

The pan European Stoxx 600 edged down 0.13%. Germany’s DAX shed 0.27%, France’s CAC 40 declined 0.15% and the U.K.’s FTSE 100 ended little changed, while Switzerland’s SMI ended lower by 0.22%. The DAX and the FTSE 100 shed about 1.2% each this week, while the CAC 40 index lost 0.5%.

Among other markets in Europe, Belgium, Czech Republic, Denmark, Poland, Portugal, Russia and Spain ended weak. Austria, Finland, Greece, Iceland, Ireland, Netherlands, Norway and Sweden closed higher.

In the UK market, Flutter Entertainment, Evraz, Smith DS, Rio Tinto, WPP, Lloyds Banking Group, Entain, Just Eat Takeaway, ICP and Ashtead Group gained 1.5 to 2.6%.

Sainsbury J, Reckitt Benckiser, IAG, Hikma Pharmaceuticals, Fresnillo, JD Sports Fashion, AstraZeneca and Tesco declined sharply.

In the French market, Air France-KLM declined more than 3%. Danone, Sanofi, Airbus Group, Essilor, Pernod Ricard and Renault ended lower by 1 to 1.4%.

ArcelorMittal, Faurecia, Publicis Groupe, Veolia, Michelin, STMicroElectronics and WorldLine ended sharply higher.

Vivendi gained nearly 3% on good results. Vinci shares moved modestly higher after the company reported a 5.1% organic growth in the first quarter, with sales rising to Euro 10.2 billion.

In the German market, Deutsche Wohnen, Bayer, Lufthansa, Adidas, Vonovia, Henkel and SAP lost 1 to 2.5%, while Infineon Technologies, Continental, Thyssenkrupp and Covestro closed with notable gains.

Shares of luxury car maker Daimler ended flat. The company increased the margin targets for its Mercedes-Benz and Mobility divisions for the year after reporting strong earnings growth in the first quarter.

In economic releases, the flash reading of the IHS Markit eurozone composite purchasing managers index rose to a nine-month high of 53.7 in April from 53.2 in March.

France’s private sector returned to growth for the first time since August 2020, flash survey data from IHS Markit showed. The flash composite output index advanced unexpectedly to 51.7 in April from 50.0 in March. The score was forecast to fall to 48.8. The services Purchasing Managers’ Index came in at 50.4, up from 48.2 in March and above forecast of 46.5.

Germany’s private sector growth moderated in April with services activity stalling and the upturn in manufacturing production partly held back by supply shortages, flash survey data from IHS Markit showed. The composite output index dropped more-than-expected to 56.0 in April from 57.3 in March. The expected score was 56.8.

The flash services Purchasing Managers’ Index came in at 50.1 in April, down from 51.5 a month ago and expectations of 50.8. The manufacturing PMI fell to 66.4 from 66.6 in the previous month.

The preliminary “flash” reading of the U.K. Composite Purchasing Managers’ Index (PMI) rose to 60.0 in April, the highest reading since November 2013, from 56.4 in March.

Meanwhile, U.K. retail sales grew more than expected in March, rising 5.4% month-on-month, faster than the 2.2% increase in February. The forecast was for an increase of 1.5%.

On the vaccine front, the European Union announced today that it would buy up to 1.8 billion doses of the Pfizer-BioNTech’s COVID-19 vaccine.

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