European Stocks Close Lower On Weak Data, Growth Concerns

European stocks ended weak on Tuesday, reacting to data showing an acceleration in eurozone inflation and ECB Governing Council member Rob Holzmann’s comments that the central bank should start debating to end the pandemic-era monetary stimulus.

A sell-off in airlines and tourism stocks after EU governments agreed to a decision to remove the US from the bloc’s safe travel list weighed as well on the markets.

The pan European Stoxx 600 declined 0.38%. The U.K.’s FTSE 100 ended 0.4% down, Germany’s DAX slid 0.33% and France’s CAC 40 edged down 0.11%, while Switzerland’s SMI closed lower by 0.2%.

Among other markets in Europe, Belgium, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Russia, Spain and Sweden ended weak.

Austria, Czech Republic, Iceland, Poland, Portugal and Turkey closed higher.

In the UK market, B&M, Natwest Group, IAG, HSBC Holdings, Sainsbury (J), BP, Johnson Matthey, Polymetal International, Aviva, Rolls-Royce Holdings, Royal Dutch Shell, M&G and Ocado Group lost 1 to 3%.

Bunzl Plc shares declined sharply after the business supplies distributor flagged that it was facing supply chain disruptions, product shortages and a labour crunch in certain markets.

Weir Group climbed 3.8%. Ferguson gained 2.75% after JP Morgan raised its price target on the plumbing and heating parts distributor.

Just Eat Takeaway.com, Persimmon, Ashtead Group, Smiths Group, Entain, Pershing Square Holdings and British American Tobacco gained 1 to 2.5%.

In the French market, ArcelorMittal declined more than 3%. Vivendi, Michelin, Faurecia, Schneider Electric and Orange lost 1 to 2%.

Atos moved up more than 2.5% and Essilor gained 2.3%. WorldLine, Sodexo, Renault, Societe Generale and BNP Paribas gained 1 to 1.5%.

In Germany, Covestro, Deutsche Telekom, Deutsche Boerse, BASF, Vonovia, Puma, Infineon Technologies, Continental and MTU Aero Engines lost 1 to 3%, while BMW, Thyssenkrupp and RWE closed notably higher.

Dutch technology investor Prosus NV gained nearly 5% after the company agreed to buy Indian payments platform BillDesk for $4.7 billion.

Biotech company Medivir AB rallied sharply after it received approval from the British Medicines & Healthcare products Regulatory Agency for the phase 1/2a combination study with MIV-818 against liver cancer.

Flash data from Eurostat showed eurozone inflation rose to 3% in August from 2.2% in July. This was the highest since November 2011 and also exceeded the European Central Bank’s 2% target and economists’ forecast of 2.7%.

According to the provisional estimate from the statistical office Insee, France consumer prices grew at the fastest pace in nearly three years in August largely driven by the rebound in manufactured goods prices linked to the end of summer sales. Consumer price inflation rose 1.9% in August from 1.2% in July. Economists had forecast the inflation rate to rise to 1.7%.

On a monthly basis, consumer prices gained 0.6% in August versus a 0.1% rise in the previous month. Prices were forecast to climb 0.4%.

The French Gross Domestic Product grew 1.1% sequentially in the second quarter, revised data from the statistical office showed. Economists had expected GDP to grow by 0.9%.

Germany’s jobless rate dropped marginally in July, falling to a seasonally adjusted 3.6%, from 3.7% in June. On an unadjusted basis, the unemployment rate held steady at 3.7% in July.

The UK mortgage approvals declined to one-year low in July following the initial tapering off of the stamp duty holiday, figures from the Bank of England showed.

Approvals for house purchases, an indicator of future borrowing, decreased further in July to 75,152 from 80,272 in June. This was the lowest since July 2020, but remained above pre-February 2020 levels. The expected level was 78,600.

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