Major European Markets Close On Weak Note

The major European markets closed weak on Monday as investors largely stayed cautious after a government crackdown pushed China stocks to their worst day in a year, and on a survey report showing German business confidence weakened unexpectedly in July.

German business sentiment index fell to 100.8 in July from a revised 101.7 in June, the ifo Institute said. The score was forecast to rise to 102.1 from June’s initially estimated value of 101.8.

Tensions between China and the U.K., and reports saying coronavirus cases are rising across the globe weighed as well on sentiment. In Russia, total virus cases have surpassed 6 million, and in Turkey cases tripled on Sunday compared to a weak earlier.

The British government is reportedly looking to remove China’s state-owned nuclear energy company General Nuclear Corp. from all future power projects in the UK. .

Investors, who are awaiting results, also looked ahead to the Federal Reserve’s monetary policy statement and Chairman Jerome Powell’s comments on inflation and interest rates.

The pan European Stoxx 600 edged down 0.03%. Germany’s DAX ended down 0.32% and the U.K.’s FTSE 100 ended lower by 0.03%, while France’s CAC 40 gained 0.15%. Switzerland’s SMI drifted down 0.67%.

Among other markets in Europe, Denmark, Netherlands and Turkey closed weak. Poland edged down marginally. Austria, Czech Republic, Finland, Greece, Ireland, Norway, Portugal, Russia and Spain closed on firm note. Belgium, Iceland and Sweden closed slightly higher.

In the UK market, Unilever, B&M, Smith & Nephew, AstraZeneca, Flutter Entertainment, Intertek Group, Pearson, Just Eat Takeaway, Experian, Croda International, Johnson & Mathey, Diageo, GlaxoSmithKline, Royal Mail and Ferguson lost 1 to 3%.

AstraZeneca, which recently completed its $39-billion acquisition of Alexion, ended sharply lower.

IAG, Antofagasta, Glencore, Anglo American Plc, Rio Tinto and BHP Group gained 3 to 4.6%. BP, Royal Dutch Shell, Evraz, Fresnillo, Whitbread, M&G, Lloyds Banking Group and Rolls-Royce Holdings also ended sharply higher.

Shares of meat producer Cranswick rallied 2.5% after saying its full-year outlook remains in line with management expectations.

In the French market, shares of car parts maker Faurecia tumbled more than 5.5% despite posting higher first-half sales and profit, and upgrading its 2021 cash flow target.

Michelin declined about 2.1%. LOreal, Teleperformance and Air Liquide shed 1 to 1.2%.

Technip rallied nearly 6%. ArcelorMittal climbed 3.8%, while Unibail Rodamco, Air France-KLM, BNP Paribas, Societe Generale, Credit Agricole, Thales, Accor and Publicis Groupe gained 0.8 to 2.7%.

In Germany, Vonovia, Adidas, Merck, Fresenius Medical Care, Volkswagen, Deutsche Post and Puma ended with sharp to moderate losses, while Thyssenkrupp and Deutsche Wohnen gained about 3.5% and 1.2%, respectively.

Low-cost Irish carrier Ryanair rallied more than 4% after the company lifted its full-year traffic forecasts after reporting a smaller-than-expected first quarter loss.

Dutch technology investor Prosus, which has a 28.9% stake in Tencent Holdings, ended more than 8% down after Beijing intensified its regulatory crackdown on the Chinese internet giant.

The Bank of England’s external monetary policy committee member Gertjan Vlieghe said in a speech to the London School of Economics that the current monetary stimulus should be maintained for several quarters at least, and probably longer.

“And when tightening does become appropriate, I suspect not much of it will be needed, given the low level of the neutral rate,” he said.

Although the expected peak in inflation looks to be higher than previously projected, Vlieghe said the view remains the same that this peak is likely to be temporary.