European indices fell sharply under PMI pressure

27.07.2015

On Monday, European stock indexes got sharply lower as disappointing Friday's data on the manufacturing sector and the service sectors of the Eurozone continue to put pressure on the stocks.

During European morning trade, the STOXX EURO 50 fell 1.11%, France's CAC 40 lost 1.21%, while the German DAX 30 fell 1.06%.

On Friday, the research group Markit said that the preliminary value of production index in Germany dropped to 51.5 this month from 51.9 in June, while the PMI index in the services sector fell to 53.7 in July from 53.8 in June compared to growth expectations of 53.9.

Markit also reported that the preliminary value of the production index in France fell to 49.6 this month from 50.7 in June, while the PMI index in the services sector fell to 52.0 from 54.1.

According to Markit, the composite PMI index of the Eurozone, which combines activity in the manufacturing and service sectors, fell to 53.7 in July from 54.2 in the previous month.

The French lenders Societe Generale (PARIS: SOGN) and BNP Paribas (PARIS: BNPP) weakened by 1.82% and 1.26%, while the German Commerzbank (XETRA: CBKG) and Deutsche Bank (XETRA: DBKGn) fell 3.46% and 2.83%.

Among the peripheral lenders, Italian Unicredit (MILAN: CRDI) and Intesa Sanpaolo (MILAN: ISP) lost 1.50% and 2.24% respectively, while the Spanish Banco Santander (MADRID: SAN) and BBVA (MADRID: BBVA) fell 1.38% and 1.40%.

Shares of Valeo (PARIS: VLOF) SA fell 3.20% after the second largest manufacturer of auto parts in France reported a 34% jump in first half profit.

The London FTSE 100 index dropped by 0.32% under the pressure of Merlin Entertainment shares which went down by 6%, after reports that the annual income will be about half of last year due to an accident on the "roller coaster" in its theme park Alton Towers in June.

Financial sector of shares has also decreased. For example, shares of Lloyds Banking (LONDON: LLOY) fell 0.45%, while shares of HSBC Holdings (LONDON: HSBA) weakened by 0.72%. In addition, shares of Ryanair Holdings lost 2.04% after the low-cost airline reported an increase in the first fiscal quarter by 25%, and that the annual rate has come close to the upper boundary of the forecast range.

Meanwhile, mining companies went broadly higher. For example, shares of Fresnillo (LONDON: FRES) and Anglo American (LONDON: AAL) rose 2.02% and 2.17%, while shares of Bhp Billiton (LONDON: BLT) and Randgolg Resources rose 2.29% and 3.39% respectively.

 

In the US, equity markets pointed to a negative trend. Futures of Dow Jones Industrial Average show a 0.17% decline, futures of the S&P 500 indicate a 0.12% drop, while the Nasdaq 100 futures reported a decrease of 0.24%.

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