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European Markets Weakened Further On Inflation Concerns

The European markets ended the first trading day of the new week firmly in negative territory. The loss extended the recent losing streak across the pond to six straight sessions.

Global equity markets were under pressure after Friday's strong U.S. employment report cemented the belief among investors that the Federal Reserve will likely hike interest rates again in March. This has raised concerns among investors about rising inflation.

Investor sentiment also took a hit after coalition negotiations between German Chancellor Angela Merkel's conservative party and the Social Democrats broke down over the weekend.

The pan-European Stoxx Europe 600 index weakened by 1.56 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 1.27 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.58 percent.

The DAX of Germany dropped 0.76 percent and the CAC 40 of France fell 1.48 percent. The FTSE 100 of the U.K. declined 1.46 percent and the SMI of Switzerland finished lower by 1.30 percent.

In Frankfurt, Lufthansa rose 0.71 percent after it unveiled plans to replace top management at Brussels Airlines.

In Paris, global consulting and IT service firm Capgemini lost 1.95 percent after announcing the acquisition of LiquidHub.

In London, Ryanair dropped 1.89 percent as the budget carrier warned of some localized disruptions and adverse PR in the months ahead.

Randgold Resources sank 7.38 percent after its fourth quarter profit fell from a year ago.

Lloyds Banking Group Plc slid 0.99 percent after it reportedly banned credit card customers from buying Bitcoin.

Engineering group Sandvik finished lower by 1.90 percent in Stockholm after its fourth-quarter core profit topped forecasts.

Leonardo tumbled 4.56 percent in Milan after UBS downgraded its rating on the stock to "Neutral" from "Buy."

The euro area economy expanded at the fastest pace since mid-2006 in January, final data from IHS Markit showed Monday. The final composite output index rose more than initially estimated to 58.8 in January from 58.1 in December. The flash score was 58.6.

Eurozone investor confidence weakened in February, survey data from think tank Sentix showed Monday. The investor sentiment index fell unexpectedly to 31.9 from 32.9 in January. The score was forecast to rise to 34.5.

Eurozone retail sales declined in December after recovering a month ago, Eurostat reported Monday. The volume of retail trade dropped 1.1 percent month-on-month in December, in contrast to the 2 percent rise posted in November. Sales were forecast to drop 1 percent.

British service sector activity expanded at a slower pace in January, largely reflecting weak gains in new work as Brexit remains the main course of concern, survey data from IHS Markit showed Monday. The IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index, dropped more-than-expected to 53.0 in January from 54.2 in December. The expected reading was 54.0.

China's private sector activity expanded at the fastest pace in seven years in January driven by accelerated rates of activity growth across both manufacturing and services. The Caixin composite Purchasing Managers' Index rose to 53.7 in January from 53.0 in December, data from IHS Markit showed Monday.

The U.S. ISM services index hit its highest level since mid-2005, a sign of further strength in the nation's economy. Economic activity in the non-manufacturing sector grew in January for the 96th consecutive month, according to a survey of purchasing managers.

The ISM's NMI index registered 59.9 percent, which is 3.9 percentage points higher than the seasonally adjusted December reading of 56 percent. Economists had expected a reading of 56.2.

by RTT Staff Writer

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