European markets ended lower on Wednesday, influenced by weak global cues and worries about economic growth. Data indicating sustained contraction in U.S. manufacturing activity and a cooling labor market added to the negative sentiment. Additionally, a downward revision in the Eurozone composite PMI exacerbated concerns.
Investor apprehension extended to China's economic outlook, with a private survey revealing slower growth in the Chinese services sector in August despite the seasonal peak in travel.
Economic activity in the U.S. manufacturing sector contracted for the fifth consecutive month in August, marking the 21st contraction in the last 22 months and sparking fears of an impending recession in the world's largest economy.
There was a positive note, however, as private sector economic growth in the Euro area accelerated in August, driven by faster services activity. HCOB's composite Purchasing Managers' Index (PMI) for the Eurozone, compiled by S&P Global, improved to 51.0 from July's 50.0.
Eurozone producer prices rose for the second consecutive month in July, fueled by higher energy costs, according to data from Eurostat. Producer prices recorded a monthly growth of 0.8%, following a 0.6% increase in the previous month.
In the U.K., the service sector saw its fastest expansion in four months, with the corresponding index rising to 53.7 in August from 52.5 in July, as per final survey data from S&P Global.
The pan-European Stoxx 600 declined by 0.97%. The FTSE 100 in the U.K. fell by 0.35%, Germany’s DAX dropped by 0.83%, France’s CAC 40 finished down by 0.98%, and Switzerland’s SMI slid by 1.39%.
Other European markets, including Austria, Denmark, Finland, Greece, Iceland, the Netherlands, Poland, Spain, Sweden, and Turkey, closed with varying degrees of losses. Belgium, Portugal, and Russia, however, ended higher, while Norway closed flat.
In the U.K. market, Airtel Africa plummeted over 5%. Barratt Developments dropped by 4.5% following a 75% decline in annual profits through June. Other significant decliners included Burberry Group, Ashtead Group, Persimmon, Convatec Group, Entain, Taylor Wimpey, Vistry Group, Antofagasta, and Pershing Square Holdings, which lost between 2% and 4.5%.
On the upside, Rolls-Royce Holdings, Imperial Brands, Vodafone Group, Compass Group, Bunzl, British American Tobacco, and Melrose Industries recorded gains of 1% to 2%.
In the German market, Infineon fell by approximately 3.8%. Other decliners, including Daimler Truck Holding, Adidas, SAP, Sartorius, Continental, HeidelbergCement, Siemens Healthineers, Mercedes-Benz, BMW, Porsche, and Volkswagen, lost between 1% and 3.3%.
Commerzbank ended significantly lower on reports from Bloomberg suggesting the German government plans to sell a 3% to 5% stake in the lender. Conversely, Vonovia gained about 2.35%, with Deutsche Telekom, Fresenius Medical Care, Deutsche Boerse, MTU Aero Engines, Puma, Fresenius, and Rheinmetall also closing notably higher.
In the French market, LVMH fell by 4.2%, while Hermes International declined by 3.8%. Other prominent losers included Kering, Pernod Ricard, Capgemini, Saint-Gobain, STMicroelectronics, L'Oreal, Renault, Legrand, Dassault Systemes, Publicis Groupe, and Veolia, with losses ranging from 1% to 2.3%.
Conversely, Sanofi, Eurofins Scientific, Danone, and Orange posted gains of 1% to 1.5%.
