European Stocks Close Notably Lower As Weak Economic Data Hurts Sentiment

European stocks closed notably lower on Wednesday as disappointing economic data from the region, and rising concerns over inflation and interest rates rendered the mood bearish. A sell-off in the U.S. market further hurt sentiment.

The pan European Stoxx 600 tumbled 1.04%. The U.K.’s FTSE 100 drifted down 0.98%, Germany’s DAX ended 0.33% down, and France’s CAC 40 fell 0.77%, while Switzerland’s SMI shed 1.01%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Ireland, Netherlands, Poland, Portugal and Spain ended weak.

Czech Republic, Greece, Iceland, Russia and Turkey closed higher, while Sweden ended flat.

In the UK market, Flutter Entertainment ended nearly 5% down and National Grid closed lower by 4.27%.

St. Jame’s Place, Whitbread, Ashtead Group, Royal Mail, Experian, Unilever, Vodafone Group, Aveva Group, Coca-Cola HBC, 3I Group and Ocado Group shed 2 to 4%.

BAE Systems rallied nearly 3%. Rolls-Royce Holdings moved up 2.35%, Bunzl gained 1.6% and Antofagasta advanced 1.2%, while British American Tobacco gained nearly 1%.

Dr. Martens shares ended with a hefty gain of nearly 19% after the British footwear brand reported record revenue in the 12 months to March 2022 and upped its outlook for the fiscal year 2023.

In France, Air France-KLM ended lower by 2.7%. Cap Gemini, L’Oreal, Air Liquide, Legrand, Credit Agricole, Pernod Ricard, Accor, Unibail Rodamco and Schneider Electric lost 1 to 2.2%.

Renault gained about 3%. Carrefour, Thales, Publicis Groupe, Safran and Societe Generale also ended notably higher.

In the German market, Zalando drifted down more than 5%. Deutsche Post, Munich RE, Deutsche Wohnen, Fresenius Medical Care, HelloFresh, Puma, Siemens Healthineers, Henkel, Merck and Vonovia ended lower by 1 to 3%.

Automobile stocks Volkswagen, BMW and Daimler gained 2 to 3%. Porsche Automobile gained nearly 1%.

Covestro, BASF, Continental and SAP also closed higher.

On the economic front, data from Eurostat showed the euro area unemployment rate remained unchanged at a record low in April, coming in at 6.8%, the same rate as seen in March. However, that was down from 8.2% in April 2021.

Final data from S&P Global showed the Eurozone manufacturing sector grew at the slowest pace in one-and-a-half years in May amid supply shortages, high inflationary pressures and weakening demand. The final factory Purchasing Managers’ Index fell to 54.6 from 55.5 in April. The score was slightly above the flash 54.4.

Germany’s manufacturing growth strengthened in May, with the final manufacturing PMI rising slightly to 54.8 from a 20-month low of 54.6 April. The flash reading was 54.7.

Meanwhile, slowdown in demand growth weighed on French factory output in May. The final manufacturing PMI fell to 54.6 from 55.7 in April but was above the preliminary reading of 54.5. This was the lowest since October 2021.

Data from Destatis revealed that retail sales in Germany fell by 5.4% in April, reversing a 0.9% rise in March, due to a record fall in food sales.

U.K. house prices grew 11.2% on a yearly basis in May, following the 12.1% increase in April, data from the Nationwide Building Society showed earlier in the day.

The UK manufacturing sector growth eased in May as weak domestic demand, ongoing disruption in supply chain and rising cost pressures weighed on production, final data from S&P Global showed on Wednesday.

The Chartered Institute of Procurement & Supply factory Purchasing Managers’ Index posted 54.6 in May, in line with flash estimate, but down from 55.8 in April. Nonetheless, the reading remained above the 50.0 mark for 24 straight months.