European Stocks Close Mixed

European stocks turned in a mixed performance on Tuesday, reacting to the latest batch of earnings announcements and economic data from the region.

The undertone was positive amid continued optimism about strong economic rebound from the pandemic. Investors shrugged off concerns about inflation and looked ahead to some crucial economic data from the U.S.

The pan European Stoxx 600 edged up 0.03%. The U.K.’s FTSE 100 slid 0.31% and France’s CAC 40 shed 0.28%. Germany’s DAX advanced 0.18% to a new high, while Switzerland’s SMI gained 0.71%.

Among other markets in Europe, Czech Republic, Iceland, Ireland, Netherlands, Poland and Russia ended higher.

Greece, Norway, Portugal and Turkey closed weak, while Austria, Belgium, Denmark, Finland, Spain and Sweden ended flat.

In the UK market, Just Eat Takeaway gained more than 4.5%. IAG, Ocado Group, Experian, Aveva Group, Smurfit Kappa Group, RightMove, Compass Group, Informa, Avast, Admiral Group, Auto Trader Group and Halma gained 1 to 2.5%.

Royal Dutch Shell, Anglo American, BT Group, Glencore, Antofagasta and BP lost 2 to 2.7%. Associated British Foods, BHP Group, Rio Tinto, Vodafone Group, Burberry Group and Smiths Group also ended notably lower.

In France, Hermes International gained more than 1.5%. Teleperformance, Air France-KLM, WorldLine, Accor, Capgemini and LOreal also closed higher.

Michelin ended nearly 3% down. Total, Safran, ArcelorMittal, Technip, Airbus Group and Carrefour lost 1 to 2%.

In the German market, Deutsche Wohnen soared nearly 16% after announcing that it had agreed to a $22 billion takeover bid from Europe’s largest residential property company Vonovia. Shares of Vonovia shed more than 6%.

Deutsche Post, Deutsche Bank, Volkswagen, Infineon Technologies, Lufthansa, Daimler, Continental and Henkel gained 1 to 3%.

Fresenius ended lower by about 3.7%, while Munich RE, Bayer, E.ON, Fresenius Medical Care, BASF and RWE lost 1 to 1.4%.

In economic news, the German economy contracted slightly more than initially estimated in the first quarter due to the coronavirus pandemic, revised data from Destatis revealed.

Gross domestic product fell 1.8% sequentially in the first quarter, in contrast to the 0.5% expansion seen in the fourth quarter. The sequential fall was revised from -1.7%. On an unadjusted basis, the annual decline in GDP deepened to 3.4% from 2.3% in the fourth quarter. The rate was revised from 3.3%.

German business sentiment improved more than expected in May, survey data from the ifo Institute revealed. The business confidence index rose to 99.2 in May from 96.6 in the previous month. The reading was also above economists’ forecast of 98.2.

UK retail sales and orders increased in the year to May but the comparison was distorted by the low level of activity during the first national lockdown twelve months ago, the latest Distributive Trades Survey from the Confederation of British Industry showed.

The retail sales balance came in at +18%, down from +20%, while the order book balance advanced sharply to 22% from -1%ent in April.

The UK budget registered its second biggest shortfall on record for the month of April, the Office for National Statistics reported.

The public sector net borrowing increased to GBP 31.7 billion in April. This was the second highest April borrowing since monthly records began in 1993, and was GBP 15.6 billion less than in April 2020.

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