European stocks ended the week on a downbeat note as investors weighed the monetary policy decisions of various central banks and digested a series of economic data from both Europe and the U.S.
The pace of business recovery in the Eurozone decelerated significantly in June, with the manufacturing sector experiencing a downturn and the services sector seeing a decline in activity. The HCOB's preliminary composite Purchasing Managers' Index, compiled by S&P Global, dropped to 50.8 from 52.2 in May.
In the U.K., private sector growth slowed to a seven-month low in June, as a deceleration in the service sector counterbalanced a stronger performance in manufacturing. The S&P Global Composite PMI fell to 51.7 from 53 in May, with some companies delaying major decisions until after the July 4 election.
However, there were a few positive signs. U.K. retail sales volumes rose by 2.9% on a monthly basis in May, recovering from a 1.8% drop in April. Additionally, British consumer sentiment improved, with the consumer sentiment index rising to -14 in May from -17 in April, according to a survey by market research group GfK.
Across Europe, the pan-European Stoxx 600 declined by 0.73%. The U.K.'s FTSE 100 dropped 0.42%, Germany's DAX fell 0.5%, France's CAC 40 decreased by 0.56%, and Switzerland's SMI ended the day down 0.95%. Markets in Austria, Denmark, the Netherlands, Norway, Poland, Portugal, and Spain also weakened. Conversely, Belgium, Iceland, and Russia saw marginal declines, while Greece, Sweden, and Turkey closed higher.
Bank stocks were notable losers amid expectations that several central banks might lower interest rates in the coming months. In the U.K. market, Antofagasta led the declines with a drop of over 4%. Other significant decliners included Convatec Group, Rolls-Royce Holdings, Smurfit Kappa Group, Glencore, Pershing Square Holdings, HSBC Holdings, NatWest Group, Marks & Spencer, B&M European Value Retail, Standard Chartered, and Barclays Group, which fell between 1.5% and 2.5%.
On the positive side, Phoenix Group Holdings surged by about 4.2%, while United Utilities, Haleon, Burberry Group, and British American Tobacco gained between 1% and 1.7%. Britvic saw a notable rally of 7.3% after the soft drinks producer rejected a second acquisition proposal of 1,250 pence per share from Danish brewer Carlsberg Group A/S.
In Germany, Siemens Energy slid about 5%, with Fresenius Medical Care and Infineon both down by approximately 3%. Deutsche Bank, Commerzbank, HeidelbergCement, Adidas, Vonovia, BMW, Siemens, Volkswagen, Mercedes-Benz, and Deutsche Post all suffered losses of 1% to 2%. Covestro bucked the trend, climbing nearly 2%, while Deutsche Boerse, Continental, Qiagen, SAP, and Hannover Rueck posted moderate gains.
French market participants saw Saint-Gobain drop by about 3.7%, while Renault declined by approximately 3%. Teleperformance, ArcelorMittal, Veolia, Societe Generale, Dassault Systemes, Capgemini, BNP Paribas, AXA, and Credit Agricole also saw drops of 1% to 2%. On the other hand, Danone, Engie, and Kering ended the day with sharp gains.
In a significant development, shares of Danish drugmaker Zealand Pharma soared nearly 19% after the company announced that an early-stage study showed a high dose of its drug helped reduce weight by an average of 8.6% over 16 weeks.
