European Stocks Close Lower After Cautious Session

European stocks closed lower on Tuesday with investors making largely cautious moves ahead of some key economic data from the region, including readings on inflation.

Analysts’ warning that the euro area’s economy, including the zone’s gross domestic product, could be impacted if Donald Trump were to win the presidential election in November weighed on sentiment.

Investors were also reacting to the results of a survey that showed German investor morale worsened more than expected in July.

The pan European Stoxx 600 ended down 0.28%. The U.K.’s FTSE 100 drifted down 0.22%, Germany’s DAX closed lower by 0.39% and France’s CAC 40 ended down 0.69%, while Switzerland’s SMI closed 0.15% down.

Among other markets in Europe, Denmark, Finland, Greece, Netherlands, Norway, Poland and Spain ended weak.

Iceland, Portugal, Russia, Sweden and Turkiye closed higher, while Austria and Belgium ended flat.

In the U.K. market, Burberry Group and Severn Trent ended down 5.3% and 4.8%, respectively. United Utilities, Glencore, Rio Tinto, Anglo American Plc and Experian lost 2 to 4%.

Hargreaves Lansdown, ICG, Entain, Land Securities Group, Shell and BT Group also ended notably lower.

Ocado shares climbed 8.5% after the online grocer raised profit forecasts for its key technology division.

B&M European Value Retail rallied 4.3%. The discount retailer sounded optimistic about achieving profitable, cash-generating growth for the full financial year after reporting a 2.4% revenue increase in Q1 FY2024.

JD Sports Fashion, Smith (DS), Marks & Spencer, Airtel Africa, Kingfisher, Rolls-Royce Holdings, F&C Investment, Sainsbury (J), IHG, Ashtead Group, Mondi, Convatec Group and Natwest Group gained 1.2 to 3.5%.

In the German market, Porsche dropped 4.7%. Hannover Rueck, Puma, Munich RE, Infineon, Mercedes-Benz, Bayer, Siemens Healthineers, Adidas, Volkswagen, BMW and Deutsche Bank ended lower by 1 to 2.3%.

German fashion house Hugo Boss plummeted more than 7% as the company lowered its full-year outlook after a challenging second quarter amid weakening consumer demand in markets such as China and the U.K.

Commerzbank climbed about 3.35%. Fresenius gained 2.5%. HeidelbergCement, Merck, Sartorius and Qiagen moved up 1 to 1.7%.

In the French market, Kering tumbled 3.1%. ArcelorMittal, Hermes International, LVMH, TotalEnergies, L’Oreal, Dassault Systemes, Pernod Ricard and Accor lost 1 to 2.5%.

SCOR plummeted after issuing a profit warning, saying it currently expects L&H insurance service result for the second quarter to be a loss of 0.4 billion euros, primarily driven by updates on reserves, and continued negative experience variance.

Saint-Gobain, Safran, Unibail Rodamco, Legrand, Credit Agricole and Edenred posted notable gains.

On the economic front, German economic confidence declined for the first time in a year in July amid weak exports, political uncertainty and the lack of clarity about the future monetary policy, survey data from the ZEW economic research institute showed.

The economic sentiment index fell sharply to a four-month low of 41.8 in July from 47.5 in the previous month. The score was forecast to drop moderately to 41.2.

By contrast, current situation improved slightly in July. The corresponding index rose to -68.9 from -73.8 in June. The reading was seen at -74.3. “The economic outlook is worsening,” ZEW President Achim Wambach said.

The euro area trade surplus declined to a four-month low in May on weak exports, official data showed. The trade balance posted a surplus of EUR 13.9 billion in May compared to a surplus of EUR 14.2 billion in April, Eurostat reported. This was the lowest surplus since January.

Nonetheless, in the same period last year, the trade balance was in EUR 0.4 billion deficit.

Exports logged a decrease of 0.5% annually, in contrast to the sharp 13.5% increase in April. At the same time, imports declined 6.4%, reversing a 1.8% rise in the previous month.

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