European Markets Close Slightly Up After Lackluster Session

European stocks closed slightly higher on Monday after a highly lackluster session as disappointing economic data weighed on sentiment.

Reports that Beijing is looking at new rules that would restrict domestic internet firms from going public in the U.S. also contributed to the subdued mood in the markets.

Investors continued to react positively to Federal Reserve Chairman Jerome Powell’s remarks at the Jackson Hole symposium last week that the bank is likely to begin tapering some of its easy money policies before the end of the year but there’s “much ground to cover” before rate hikes happen.

The pan European Stoxx 600 edged up 0.07%. Germany’s DAX gained 0.22% and France’s CAC 40 crept up 0.08%, while Switzerland’s SMI declined marginally. The U.K. market was closed for a bank holiday.

Among other markets in Europe, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Portugal, Russia and Turkey closed higher.

Norway and Spain closed weak, while Austria, Belgium, Czech Republic and Sweden ended flat.

In the German market, Thyssenkrupp and Covestro both gained more than 2%. Henkel, BASF, BMW, Infineon Technologies, Daimler and Deutsche Post closed with moderate gains.

Munic RE, Fresenius Medical Care, Deutsche Telekom and Lufthansa ended notably lower.

In France, STMicroElectronics, Vivendi, Air Liquide, LOreal, Teleperformance and ArcelorMittal closed with sharp to moderate gains.

Faurecia, Air France-KLM and Societe Generale lost 1.4 to 1.7%. Technip, Saint Gobain, Valeo, Sodexo and BNP Paribas also ended notably lower.

In economic releases, Eurozone business and household confidence declined slightly in August, following July’s record high, the European Commission said.

The economic sentiment indicator, an aggregate measure of business and consumer confidence, dropped to 117.5 in August from 119.0 in July.

The industrial sentiment index came in at 13.7, down from 14.5 in the previous month. The reading was forecast to ease to 13.4.

The consumer confidence stood at -5.3 in August, in line with flash estimate, and down from -4.4 in the previous month. The services confidence declined more-than-expected to 16.8 from 18.9 in the previous month. The expected level was 18.8.

The economic confidence index for the EU came down to 116.5 in August from an all-time high of 118.0 in July.

Data from Destatis showed Germany’s inflation accelerated to its highest level since 2008 in August driven by energy prices. Consumer price inflation rose to 3.9% in August, as expected, from 3.8% in July.

EU harmonized inflation advanced to 3.4% from 3.1% a month ago. The HICP annual rate also matched economists’ expectations. The final data for August is due on September 10. The 3.4 percent inflation was the highest since 2008.

Switzerland’s economic sentiment weakened for a third month in a row and at a sharp rate in August, suggesting that the recovery from the pandemic is set to continued albeit at a slower pace, results of a survey showed.

The Economic Barometer fell to 113.5 from 130.9 in July, revised from 129.8, the monthly survey by the KOF economic institute showed. Economists had forecast a score of 125.0.

The European Central Bank (ECB) will meet next week to announce its monetary policy. ECB chief Christine Lagarde last month promised sustained support for the single currency zone, saying the central bank has learned from the errors of past crises and won’t derail the current economic recovery by withdrawing emergency support too early.

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