European Stocks Close Lower On Growth Worries, Weak Earnings

European stocks closed lower on Thursday, weighed down by losses in technology sector following a sell-off in U.S. heavyweight stocks a day earlier due to disappointing quarterly earnings.

Concerns over Chinese demand and weak German business sentiment data weighed as well on markets.

The pan European Stoxx 600 ended flat. The U.K.’s FTSE 100 gained 0.4%, while Germany’s DAX and France’s CAC 40 ended down 0.48% and 1.15%, respectively. Switzerland’s SMI dropped 0.8%.

Among other markets in Europe, Austria, Denmark, Greece, Iceland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkiye closed weak, while Belgium and Finland ended higher.

In the UK market, Centrica plunged nearly 10%. The integrated energy company announced that Scott Wheway would step down as Chair of the Company and would not seek re-election as a director.

Airtel Africa, Endeavour Mining and Pershing Square Holdings lost 6.7 to 7.1%. Fresnillo and Howden Joinery ended down 4.1% and 3.7%, respectively.

Reckitt Benckiser, SSE, ICG, Informa, JD Sports Fashion, Auto Trader Group, Halma, AstraZeneca, Smith (DS) and F&C Investment Trust lost 1 to 2.5%.

Unilever rallied 6.2% after beating first-half expectations. British American Tobacco climbed 5.3% after delivering its first-half performance for 2024 in line with its expectations.

Easyjet, Imperial Brands, Relx, Haleon, Vodafone Group, Anglo American Plc, Sage Group, Burberry Group, Ashtead, Deageo, Pearson, Smith & Nephew and Associated British Foods gained 1.2 to 4%.

Lloyds Banking Group shares ended notably lower after the lender reported a 14% fall in first half pretax profit.

In the German market, Infineon tumbled 6.5%. Rheinmetall ended down 5% and Siemens Energy closed lower by about 3.3%.

Henkel, HeidelbergCement, Siemens, Adidas, Puma and BMW lost 1 to 2.2%.

Bayer gained more than 2%. Fresenius, Qiagen, E.ON, Fresenius Medical Care, Zalando and Deutsche Telekon also ended notably higher.

In the French market, STMicroElectronics tanked more than 13% after cutting its full-year outlook for the second time this year.

Kering lost about 7.4% after issuing another profit warning. Stellantis and Renault lost 8.6% and 7.4%, respectively.

Carrefour ended down 2.5% after upholding its end-year profit and cashflow targets.

Vivendi, Schneider Electric, Legrand and Unibail Rodamco lost 2.3 to 5.5%. Hermes International, Thales, L’Oreal, Capgemini, Essilor, Airbus and LVMH also closed notably lower.

Michelin, Eurofins Scientific and Sanofi gained 4 to 5%. Pernod Ricard, BNP Paribas and Orange posted moderate gains.

On the economic front, German economic sentiment declined sharply in July as signs of economic recovery faded, survey data from the ifo Institute showed.
The ifo Business Climate Index fell unexpectedly to a five-month low of 87.0 in July from 88.6 in June. The reading was seen at 88.9.

The survey showed that companies were less satisfied with the current business situation and their skepticism regarding the coming months increased considerably.

“The German economy is stuck in crisis,” ifo Institute President Clemens Fuest said.

Survey data released by the statistical office INSEE showed France’s manufacturing confidence weakened to the lowest since late 2020 largely due to weaker general and personal production expectations.The business climate index in manufacturing declined to 95 in July from 99 in June. This was the lowest reading since December 2020.

Optimism among British manufacturers dropped marginally in July but their output expectations hit the strongest since March 2022, a closely watched survey showed.

After rising in April for the first time in nearly three years, the business confidence index fell to -9 percent from +9 in April, the latest quarterly Industrial Trends Survey results from the Confederation of British Industry showed.

UK car output declined in the first six months of the year as manufacturers continue to shift their investment to make electrified models, the Society of Motor Manufacturers and Traders said Thursday. In the first six months of the year, car production declined 7.6 percent from the previous year.

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