European Stocks Close Lower On Weak Economic Data

European stocks closed lower on Monday, weighed down by weak manufacturing and services sector activity from the major economies in the region. Political instability in France and Germany weighed as well.

The mood was down also due to downgrading of France’s rating by credit ratings agency Moody’s. The agency’s decision to downgrade the rating has added to pressure on the nation’s borrowing costs and raised doubts over whether a new government can mend the deteriorating financial situation.

The pan European Stoxx 600 closed down 0.12%. France’s CAC 40 fell 0.71%, while the U.K.’s FTSE 100 and Germany’s DAX ended lower by 0.46% and 0.45%, respectively. Switzerland’s SMI edged up 0.06%.

Among other markets in Europe, Austria, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Russia, Sweden and Turkiye closed weak.

Belgium, Denmark, Portugal and Spain ended higher.

In the UK market, Entain tumbled more than 6% after Australia’s anti-money laundering regulator had opened civil penalty proceedings related to alleged breaches of the country’s contraventions anti-money laundering and counter-terrorism law.

Centrica closed lower by about 3.7%. Convatec Group, Endeavour Mining, BP, Persimmon, Croda International, SSE, Unite Group, Pershing Square Group, Airtel Africa, Rentokil Initial, Prudential, Associated British Foods, B&M European Value Retail, Shell, British Land, Fresnillo, Aviva, Sainsbury (J), Rio Tinto and Ashtead Group lost 1 to 3%.

Rolls-Royce Holdings gained nearly 2%. 3i Group, Halma, IAG and Bunzl closed higher by 1 to 1.4%.

In the German market, Mercedes-Benz, Vonovia and BMW lost 3 to 4.2%. Porsche closed nearly 3% down. The company withdrew its profit guidance for 2024, citing potential non-cash impairment charges related to its investment in Volkswagen AG and Porsche AG.

Volkswagen, RWE, Daimler Truck Holding, Continental, BASF, Puma, E.ON, Bayer, Covestro, HeidelbergCement and Brenntag lost 1 to 2.3%.

Siemens Energy rallied about 4%. Commerzbank climbed 2%. Adidas, MTU Aero Engines, Rheinmetall and Munich RE gained 1 to 1.3%.

In the French market, Vivendi soared more than 40% as three major businesses formerly within the media conglomerate — Canal+, Louis Hachette Group and Havas — listed in Europe on Monday. The spinoff was approved by Vivendi shareholders earlier this month in a bid to give each entity a higher valuation.

Stellantis and Teleperformance, both ended lower by more than 4%. Dassault Systemes, TotalEnergies, STMicroElectronics, Kering, Michelin, Engie, Renault, Pernod Ricard, Carrefour, Unibail Rodamco, LVMH, Capgemini, Airbus Group and Vinci closed down 1 to 2.3%.

Essilor closed higher by about 1.3%. Safran and Edenred closed with modest gains.

Eurozone private sector contracted at the end of the year reflecting the falls in Germany and France, while the rest of the region posted a solid increase in output. The HCOB flash composite output index rose to 49.5 in December from 48.3 in November, pointing to a softer and marginal fall in output, survey results from S&P Global showed.

The manufacturing Purchasing Managers’ Index remained unchanged at 45.2 and was below the forecast of 45.3, while the services PMI advanced to 51.4 in December from 49.5 a month ago. The reading was expected to remain at 49.5.

France’s private sector contracted for the fourth straight month in December as both manufacturers and services providers registered declines in output, flash survey results from S&P Global showed on Monday. The HCOB composite output index posted 46.7 in December, up from 45.9 in November. A reading below 50 indicates contraction.

The manufacturing Purchasing Managers’ Index dropped unexpectedly to 41.9 in December from 43.1 in the previous month. The expected score was 43.2. Meanwhile, the services PMI rose to 48.2 in December, while it was expected to remain unchanged at 46.9.

Germany’s private sector continued to shrink in December albeit the pace of contraction softened on a slight rebound in services activity, flash data from S&P Global showed. The HCOB composite output index registered 47.8 in December, up from November’s nine-month low of 47.2. However, the reading is still below the 50.0 threshold that separates growth from contraction.

The flash services Purchasing Managers’ Index advanced more-than-expected to 51.0 from 49.3 a month ago. The expected score was 49.5. Meanwhile, the flash manufacturing PMI declined to 42.5 from 43.0 in the previous month. The score was forecast to edge up to 43.1.

The UK private sector logged a steady growth in December with rising activity across the services economy offsetting an accelerated downturn in manufacturing output. The flash composite output index posted 50.5 in December, unchanged from November’s 13-month low.

The factory Purchasing Managers’ Index fell to an 11-month low of 47.3 compared to 48.0 in November. The reading was seen at 48.4. By contrast, the services PMI rose to 51.4, up from 50.4 in the prior month. The reading was above forecast of 50.9.