European stocks reported a slump on Tuesday as investor concern over the prospects for global economic growth heightened. This was in response to the lack of new stimulus from China and an unclear schedule for interest rate cuts, fostering a cautious atmosphere.
All eyes stayed on a number of key economic cues, including the latest economic data from Europe and the USA, as well as updates on earnings. Investors were also mindful of other significant events on the radar, such as the testimony of Jerome Powell, the Chair of the Federal Reserve, in Congress this week, the UK's budget announcement and the European Central Bank’s announcement of its monetary policy.
The pan-European Stoxx 600 closed 0.23% lower, with Germany’s DAX dropping by a slight 0.1%. France's CAC 40 decreased by 0.3%, while the UK's FTSE 100 managed a modest 0.08% increase. Switzerland's SMI also closed lower by 0.12%. Several other European markets, including Belgium, Denmark, Finland, Greece, the Netherlands, Poland, Sweden and Turkey also ended the day weakly. On the other hand, markets in Iceland, Norway, Portugal, Russia and Spain achieved higher closings, while Austria held steady.
In the UK, the company Ashtead’s shares plunged by over 9% as it projected that its full-year group revenues would likely sit at the lower end of its predictions. Other UK companies, including Antofagasta, RS Group, Hikma Pharmaceuticals, Croda International, Prudential, Scottish Mortgage, Rentokil Initial, The Sage Group, Rio Tinto and Barratt Developments also saw decreases of 1% to 4%.
Conversely, some companies, such as Intertek, rallied by 6%. Similarly, Endeavour Mining, Marks & Spencer, Fresnillo, and SSE reported gains of between 2% and 5%. A few other companies, such as Weir Holdings, National Grid, Glencore, BAE Systems, Compass Group and Convatec Group, closed noticeably higher.
In Germany, Fresenius Medical Care soared by 11% while Fresenius reported an increase of about 3.5%. However, Bayer's stock plunged by more than 7%. Several other German companies, including Siemens Energy, Deutsche Post, HeidelbergCement, Infineon, Siemens and Volkswagen, also saw a decrease between 1% and 1.7%.
In France, several companies including Alstom, Dassault Systemes, Capgemini, Schneider Electric, ArcelorMittal, Hermes International, Saint Gobain among others, lost between 1% and 3.4%. However, Thales, the defence and technology group soared by more than 9% after it announced an expectation of further growth in turnover and operating margin for the year.
On the economic front, preliminary data from the statistical office INSEE showed that France's industrial production in January declined faster than expected, driven by a slump in manufacturing activity. However, the euro area private sector moved closer to stabilisation as renewed services activity expansion offset further contraction in manufacturing.
Meanwhile, Germany's business activity contracted the most in four months in February due to an accelerated reduction in manufacturing output.
In the UK, the services Purchasing Managers' Index fell to 53.8 in February, down from 54.3 in January. However, new car sales in the UK rose for the nineteenth consecutive month, achieving the best performance for February since 2004.
