European stock markets closed predominantly lower on Thursday, influenced by inflation concerns and uncertainties surrounding potential Federal Reserve interest rate decisions. Investors were particularly focused on forthcoming U.S. personal consumption expenditure data, viewed as critical for insights into future Fed policy.
Additionally, the impending French parliamentary elections contributed to investor caution. Higher bond yields also negatively impacted the markets.
The pan-European Stoxx 600 fell by 0.43%. The UK’s FTSE 100 dropped 0.55%, France’s CAC 40 decreased by 1.03%, while Germany’s DAX rose by 0.3%. Switzerland’s SMI saw a slight decline of 0.09%.
Other European markets, including Denmark, Greece, Portugal, Spain, and Sweden, also ended the day in negative territory. Conversely, Finland, Iceland, the Netherlands, Norway, Poland, and Turkey closed higher. Austria and Belgium experienced slight upticks.
In the UK market, Burberry Group experienced a significant drop of about 6.5%. GSK shares declined by 4.6% following a revised recommendation from a U.S. public health agency restricting the use of respiratory syncytial virus (RSV) vaccines.
Financial entities such as Prudential, British American Tobacco, and 3i Group faced losses ranging from 2.9% to 3.3%. Other notable declines included Hikma Pharmaceuticals, Associated British Foods, Diageo, AstraZeneca, Rio Tinto, B&M European Value Retail, Severn Trent, Rolls-Royce Holdings, and Anglo American Plc, with reductions of 1.5% to 2.3%.
On a positive note, Smith (DS) Plc shares surged by 15.7%, and Mondi rallied by 3.6%. Gains between 1% and 2% were reported for Barclays Group, Admiral Group, Airtel Africa, Halma, Smiths Group, Relx, Diploma, Rentokil Initial, Intertek Group, Pearson, Auto Trader Group, Bunzl, and Howden Joinery.
In Germany, Rheinmetall, Sartorius, Beiersdorf, and Zalando all fell between 2% and 3%. RWE, Mercedes-Benz, Porsche, Infineon, and E.ON experienced notable declines. Conversely, MTU Aero Engines appreciated by over 5.5%, Siemens gained approximately 2.5%, and HeidelbergCement and Vonovia saw significant gains.
In the French market, Stellantis, Edenred, L'Oreal, Vinci, Pernod Ricard, and Bouygues fell by 2% to 4.3%. Veolia, Dassault Systemes, Engie, Essilor, LVMH, Publicis Groupe, STMicroelectronics, Danone, and Carrefour also ended significantly lower.
Kering gained 4.7%, and Unibail Rodamco appreciated by roughly 1.6%. Teleperformance and Safran reported modest gains.
Watches of Switzerland Group, a British retailer specializing in Swiss watches and other luxury goods, saw an 8.5% surge after indicating signs of stability in the UK’s premium and luxury watch market, following a post-COVID sales slump.
Swedish clothing giant Hennes & Mauritz AB plummeted by 13% after posting a smaller-than-expected increase in second-quarter profits.
Economic confidence within the Eurozone unexpectedly weakened in June, according to survey data from the European Commission. The economic confidence index registered at 95.9 in June, slightly down from 96.1 in May, contrary to an anticipated rise to 96.2. The score indicated stable sentiment in the industry as well as among consumers and service providers, though confidence in construction and retail sectors deteriorated.
UK car production continued its decline for the third consecutive month in May, as factories transitioned to accommodate electric mobility, according to the Society of Motor Manufacturers and Traders (SMMT). Car production fell by 11.9% compared to the previous year, totaling 69,652 units in May.
