European stocks closed weaker on Friday amidst political uncertainty ahead of France's forthcoming parliamentary elections. Investors were also digesting inflation data from France and the U.K., in addition to a report on U.S. personal consumption expenditure.
The pan-European Stoxx 600 ended down by 0.23%. The U.K.'s FTSE 100 slipped 0.19% and France's CAC 40 dropped 0.68%. Conversely, Germany's DAX gained 0.14%, while Switzerland's SMI marginally declined by 0.09%.
Other European markets including Belgium, Denmark, Finland, Iceland, Ireland, the Netherlands, Portugal, and Turkey also closed weaker. However, Austria, Greece, Poland, and Sweden ended higher, with Russia and Spain finishing flat.
In the U.K. market, JD Sports Fashion fell 5.5% after Nike, the world's largest sportswear maker by revenue, warned of declining sales this year. Marks & Spencer, Burberry Group, Lloyds Banking Group, WPP, Bunzl, Compass Group, Croda International, B&M European Value Retail, Reckitt Benckiser, RightMove, Haleon, and Auto Trader Group experienced losses ranging from 1.4% to 2.5%. On the upside, 3i Group shares rose by approximately 2.3%, while Airtel Africa, Beazley, EasyJet, Unite Group, and Intertek gained between 1% and 1.25%.
In Germany, Siemens Healthineers dropped nearly 3%, with Puma also down 2.5%, impacted by Nike's sales warning. RWE, Deutsche Boerse, Beiersdorf, Siemens Energy, and E.ON recorded losses of 1% to 2%. However, Zalando climbed approximately 2.7%, MTU Aero Engines rose nearly 2.5%, and Daimler Truck Holding, Mercedes-Benz, Volkswagen, SAP, Sartorius, and Bayer gained 1% to 2%.
In France, L'Oreal and Teleperformance both declined by about 3%. Edenred, Legrand, Airbus Group, Publicis Groupe, Hermes International, Credit Agricole, Pernod Ricard, Carrefour, Air Liquide, Capgemini, and Societe Generale saw losses of 1% to 2.3%. Meanwhile, STMicroElectronics, Renault, Dassault Systemes, ArcelorMittal, TotalEnergies, and Bouygues posted gains ranging from moderate to significant.
On the economic front, the British economy recovered more robustly than initially estimated in the first quarter, growing 0.7% from the previous quarter, according to the latest data from the Office for National Statistics. This revised growth rate was up from the initially estimated 0.6%. This recovery indicates that the country has emerged from a technical recession, following GDP contractions in the previous two quarters. On an annual basis, GDP advanced by 0.3% in the March quarter, revised up from an initial estimate of 0.2%.
In Germany, import prices saw their smallest decline since the sequence of decreases began in March 2023, dropping 0.4% year-over-year in May, compared to a 1.7% fall in April.
France's consumer price inflation eased in June to its lowest level in nearly three years, with producer prices declining for the sixth consecutive month in May. The consumer price index rose 2.1% year-over-year in June, down from 2.3% in the previous month.
Germany's joblessness increased more than expected in June, with the unemployment rate rising slightly according to preliminary figures from the Federal Labor Agency. Seasonally adjusted unemployment grew by 19,000 persons in June following a 25,000 increase in May, against economists' forecasts of a 15,000 rise.
In the U.S., data from the Commerce Department indicated that the personal consumption expenditures (PCE) price index remained unchanged in May after a 0.3% increase in April. The core PCE price index, excluding food and energy prices, inched up by 0.1% in May following an upwardly revised 0.3% rise in April. These figures aligned with economists' expectations, which had anticipated a 0.1% increase for the core PCE price index. Additionally, the annual growth rates for both the PCE price index and the core PCE price index slowed to 2.6% from 2.7% and 2.8%, respectively, in line with estimates.
