The European markets were under pressure throughout the trading day on Friday and closed in negative territory. Data from China showed that export and import growth slowed more than expected in July. The news came on the heels of yesterday's announcement that inflation in China eased to a 30-month low. Also, China's industrial production and retail sales reports from Thursday both came up short of expectations.
Chinese export and import growth slowed more than expected in July, adding to a string of downbeat data released this week. The data paints a bleak economic picture, especially as the world's second largest economy has seen its GDP growth ease to the lowest in more than three years in the second quarter.
Exports grew just 1 percent year-on-year in July, decelerating from the 11.3 percent growth reported for June, the latest figures from the General Administration of Customs showed Friday. Economists had forecast a relatively modest slowdown to 8 percent.
Imports also rose at a slower rate in July. Overseas purchases increased at a pace of 4.7 percent year-on-year compared to a 6.3 percent rise in June. Economists expected import growth to pick up to a 7 percent pace.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.51 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.01 percent.
The DAX of Germany dropped by 0.29 percent and the CAC 40 of France fell by 0.61 percent. The FTSE 100 of the U.K. decreased by 0.08 percent and the SMI of Switzerland closed lower by 0.34 percent.
In Frankfurt, Commerzbank fell by 3.34 percent. Deutsche Bank downgraded its rating on the stock to "Hold" from "Buy." Deutsche Bank finished down by 1.57 percent.
Hannover Re reported a marginal increase in second-quarter operating profit that missed analysts' consensus estimates. The stock decreased by 2.63 percent.
Fraport lost 0.28 percent. The owner and operator of Frankfurt Airport reported growth in passenger traffic at all its airports.
Steel giant ThyssenKrupp reported a decline in its third-quarter earnings, but profit and sales beat analysts' estimates. The stock surged by 5.75 percent.
Deutz climbed by 5.56 percent. UBS raised the stock to "Neutral" from "Sell."
In London, Prudential gained 0.75 percent, after reporting first-half results.
Bunzl dropped by 4.88 percent, reportedly on a broker downgrade.
Barclays is increased by 2.74 percent, after announcing that David Walker will become its new Chairman.
Standard Chartered lost 2.60 percent, even though HSBC raised its rating on the stock.
Germany's EU harmonized inflation came in below the preliminary estimates In July, final data released by the Federal Statistical Office showed Friday. Month-on-month, the harmonized index of consumer prices moved up 0.4 percent in July, unrevised from the flash estimates. In June, prices dropped 0.2 percent sequentially.
Industrial production in France remained unchanged in June, as factory activity continued to be subdued hurt by the euro area debt crisis and adds to the outlook that the second biggest economy may have slipped into recession in the third quarter.
Overall industrial production remained unchanged from May when it decreased 2.1 percent, which was revised from 1.9 percent, statistical office Insee said. Economists were looking for a 0.1 percent increase in June.
Output price inflation in the U.K. slowed in July to the lowest since October 2009, signaling further easing of inflationary pressures in the economy, the latest figures from the Office for National Statistics showed Friday.
Factory-gate inflation eased to 1.7 percent in July from a revised 2 percent in June. The last time the annual rate was lower was in October 2009, when the index rose 1.5 percent, according to the statistical office. Economists had forecast the rate of inflation to ease to 2 percent from June's originally estimated 2.3 percent.
Construction output in the U.K. declined 3.9 percent quarter-on-quarter in the second quarter, the latest figures from the Office for National Statistics showed Friday. The decline was smaller than the 5.2 percent fall estimated in the preliminary report on the second quarter gross domestic product.
According to the statistical office, the estimated impact on the second quarter GDP from this release of construction output data is an upwards revision of 0.1 percentage points.
U.S. import prices unexpectedly decreased in the month of July, according to a report released by the Labor Department on Friday, although the report also showed an unexpected increase in export prices.
The Labor Department said import prices fell by 0.6 percent after tumbling by 2.4 percent in June. The continued drop surprised economists, who had expected import prices to increase by 0.2 percent.
At the same time, the report said export prices rose by 0.5 percent in July following a 1.7 percent decrease in the previous month. Economists had expected export prices to edge down by 0.1 percent.
by RTT Staff Writer
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