Major European Markets Close Weak On Interest Rate Concerns

The major European stocks closed lower on Friday, drifting down for a second straight session, on concerns the Federal Reserve will likely keep interest rates higher for a longer time. Some disappointing earnings updates hurt as well.

Interest-rate worries were back in focus after three Federal Reserve officials said the U.S. central bank should keep borrowing costs high for longer.

China reported mixed economic data, but the country’s central bank moved again to help the struggling property sector, helping ease concerns around economic recovery.

Closer home, Eurozone CPI was finalized at 2.4% year-on-year in April, unchanged from March’s reading.

France’s unemployment rate held steady in the first quarter after rising in the previous quarter, the statistical office INSEE reported.

The ILO unemployment rate stood at 7.5% in the first quarter, the same as in the previous quarter. The expected rate was 7.4%.

It was 0.4 points above its first quarter of 2023 level, which, like in the fourth quarter of 2022, was the lowest since 1982, the agency said.

Earlier today, ECB Vice-President Luis de Guindos said that inflation in the Eurozone will move near its target of 2% in 2025.

Elsewhere, delivering a speech on the state of the economy, U.K. chancellor Jeremy Hunt promised further tax cuts if the Conservatives win the general election.

The pan European Stoxx 600 ended down 0.13%. The U.K.’s FTSE 100 closed lower by 0.22%, Germany’s DAX settled 0.18% down, and France’s CAC 40 drifted down 0.26%. Switzerland’s SMI, bucking the trend once again, climbed 0.76%.

Other markets in Europe closed mixed. Denmark, Finland, Greece, Portugal and Sweden ended weak.

Austria, Iceland, Norway, Poland, Russia, Spain and Turkiye closed higher, while Belgium and Netherlands ended flat.

In the UK market, Antofagasta and Fresnillo climbed 3.55% and 3.36%, respectively. Rio Tinto ended nearly 2.5% up. Sage Group, Anglo American Plc, Tesco, Smith (DS), BT Group and United Utilities also ended notably higher.

Entain dropped about 5.5%. Ashtead Group drifted down 4.51%, while Burberry Group, JD Sports Fashion, Spirax-Sarco Engineering and Flutter Entertainment closed lower by 2 to 3.5%.

Auto Trader Group declined sharply following a rating downgrade by Morgan Stanley. Land Securities dropped more than 2% after annual earnings from rental income dropped to £371 million from £393 million in 2023.

In the German market, Commerzbank, Symrise and Deutsche Boerse gained 1.6 to 2%. Covestro, Daimler Truck Holding, Munich RE and Deutsche Telekom posted moderate gains.

E.ON dropped more than 5%. Zalando, Sartorius, Fresenius Medical Care, Siemens Healthineers, MTU Aero Engines, Fresenius, HeidelbergCement, RWE, Siemens Energy, Siemens, Deutsche Bank, Porsche and Continental also ended notably lower.

In the French market, Carrefour, Credit Agricole, Michelin, Essilor, BNP Paribas, Vivendi, Renault and TotalEnergies closed on firm note.

Teleperformance, Kering, Legrand, Stellantis, Eurofins Scientific, Schneider Electric, L’Oreal, Sanofi, Publicis Groupe, Edenred and STMicroElectronics lost 1 to 3%.