European Stocks Close Lower As Investors Digest Economic Data, Earnings

European stocks closed lower on Wednesday as investors reacted to earnings announcements from U.S. tech majors and global financial institutions, and looked ahead to some crucial U.S. data, including a GDP report and inflation readings for more clarity about the Federal Reserve’s likely interest rate moves.

The mood was hurt by concerns about economic recovery after a survey showed business activity in the eurozone slowed further in July, signaling a “near-stagnation.”

The pan European Stoxx 600 fell 0.61%. The U.K.’s FTSE 100 ended down 0.17%, Germany’s DAX closed lower by 0.92%, and France’s CAC 40 ended 1.12% down, while Switzerland’s SMI settled with a loss of 0.62%.

Among other markets in Europe, Belgium, Denmark, Finland, Greece, Iceland, Netherlands, Norway, Poland, Sweden and Turkiye closed weak.

Austria, Portugal and Russia ended higher, while Spain closed flat.

In the UK market, Rolls-Royce Holdings ended down 3.5%. Scottish Mortgage, Pershing Square Holdings, Schrodders, ICG, Entain, Burberry Group and Halma lost 1.9 to 3%.

Endeavour Mining rallied more than 4%. Informa ended up 3.7%. EasyJet gained about 3% after a strong Q3 trading update.

Intertek Group, Vistry Group, Barratt Developments, Smith (DS), Reckitt Benckiser, Antofagasta, Anglo American Plc, Rio Tinto, Howden Joinery, Persimmon and JD Sports Fashion gained 1.3 to 3%.

Fresnillo moved higher after the gold and sliver miner said it was on track to meet full-year guidance.

In the German market, Deutsche Bank tanked more than 8% after the lender reported its first quarterly loss in four years.

Daimler Truck Holding ended down 3.2%. HeidelbergCement, Siemens Energy, SAP, Infineon, Beiersdorf, Siemens, Commerzbank, Allianz, Vonovia and BMW lost 1 to 2.2%.

Sartorius climbed about 3.3%. Fresenius Medical Care gained 2.25%. Symrise, Merck, Zaland0 and Adidas closed notably higher. Rheinmetall climbed after reporting significantly higher sales and operating result in the second quarter, beating market expectations.

In the French market, LVMH and Kering both ended more than 4.5% down, after sales slowed in the second quarter.

Safran, Hermes International, Saint Gobain, Dassault Systemes, L’Oreal, Pernod Ricard, Accor and Airbus Group lost 1.2 to 2.5%.

Edenred and Eurofins Scientific ended stronger by about 3.7% and 3.4%, respectively. Orange and ArcelorMittal also ended notably higher.

The euro area private sector recovery waned further in July amid deteriorating manufacturing sector performance and softening services activity growth, a survey compiled by S&P Global showed.

The HCOB composite output index dropped unexpectedly to 50.1 in July from 50.9 in June. The score was seen at 51.1. A score above 50.0 indicates expansion.

The services Purchasing Managers’ Index posted 51.9 in July, down from 52.8 a month ago. The score was forecast to climb to 52.9. At 45.6, the manufacturing PMI slid to a seven-month low from 45.8 seen in June and also below economists’ forecast of 46.1.

Germany’s private sector slipped into contraction in July due to the deeper decline in manufacturing and slower growth of services activity. The HCOB composite output index dropped unexpectedly to 48.7 from 50.4 in June.

The services PMI registered a four-month low score of 52.0 in July, while it was expected to remain unchanged at 53.1. The manufacturing PMI plunged unexpectedly to 42.6 from 43.5 a month ago. The consensus was 44.0.

France’s private sector output moved closer to stabilization in July as the Olympic Games fueled economic activity. The HCOB composite output index posted 49.5 in July, up from 48.2 in June.

The flash factory PMI eased to 44.4 from 45.3 in June. The score was forecast to rise to 45.8. On the other hand, the services PMI rose to a three-month high of 50.7 from 48.8 in the previous month. The expected reading was 49.7.

The UK private sector activity expanded at a faster pace in July, underpinned by robust demand and strengthening business confidence, flash survey results published by S&P Global revealed on Wednesday.

The flash composite output index rose to a 2-month high of 52.7 in July from 52.3 in June. The score was forecast to rise to 52.6.

During July, service activity growth accelerated slightly, while manufacturing output rose to the strongest degree since February 2022, the survey said.

The services business activity index stood at 52.4 versus 52.1 in June, just below the expected score of 52.5.

The manufacturing Purchasing Managers’ Index climbed to a 2-year high of 51.8 I July from 50.9 in June.

German consumer confidence is set to improve moderately in August on improving income prospects and willingness to buy, a survey showed on Wednesday. The consumer confidence index improved to -18.4 in August from revised -21.6 in July, the survey published jointly by GfK and the Nuremberg Institute for Market Decisions showed.