logo
Plus   Neg
Share
Email

European Markets Close Weak

European markets ended lower on Tuesday, weighed down by concerns over the potential impact of the coronavirus outbreak in China on the global economy, Apple Inc's sales warning, and some disappointing quarterly earnings reports.

Data showing a deterioration in German investor confidence hurt as well.

The pan European Stoxx 600 declined 0.38%. The U.K.'s FTSE 100 ended down 0.69%, Germany's DAX declined 0.75% and France's CAC 40 closed lower by 0.48%, while Switzerland's SMI eased 0.2%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkey closed weak.

Denmark, Iceland and Italy ended on a positive note, while Czech Republic and Ireland ended flat.

Automobile shares ended mostly lower after industry data showed Europe's passenger car demand dropped in January.

Passenger car registrations contracted 7.5% year-on-year in January due to the uncertainty caused by U.K.'s departure from the European Union and weakening of global economic conditions.

Car sales dropped 13.4% year-on-year in France, the strongest fall among the main markets, and by 7.6% in Spain. Sales declined by 7.3% in Germany and 5.9% in Italy.

In the German market, HeidelbergCement, Daimler, Deutsche Post, Deutsche Bank, Infineon and Adidas lost 2 to 3%.

BMW, Wirecard, Volkswagen, Continental and BASF also declined sharply, while RWE, Deutsche Telekom and Vonovia posted strong gains.

In France, Renault declined more than 6%. Technip eased by about 3.1%. ArcelorMittal, Saint Gobain, Credit Agricole, Kering, Bouygues and Legrand lost 1.4 to 2.8%.

Carrefour gained about 3.5%. Sanofi and Engie also ended notably higher.

In the UK market, HSBC plunged more than 6.5% after the bank said its net profit plunged 53% in fiscal 2019 due to a substantial amount of goodwill impairment.

Glencore, Auto Traders, Antofagasta and Smurfit Kappa ended lower by 3 to 4.5%.

The downtrend in European markets was due largely to Apple Inc's warning that it would not meet its guidance for March-quarter revenue because of slower iPhone production.

Reports that the U.S. may force global chipmakers using American-made equipment to obtain licenses before supplying chips to Huawei hurt as well.

In economic news, Germany's economic sentiment logged a steep fall in February as investors increasingly grew concerned about the impact of the coronavirus outbreak in China, results of a closely watched survey showed on Tuesday.

The investor confidence indicator slumped to 8.7 from 26.7 in January, survey results from the ZEW - Leibniz Centre for European Economic Research revealed. The latest score was the weakest since November, when it was -2.1.

The reading was much worse than the 21.5 economists had expected.

The current conditions index of the survey fell to -15.7 from -9.5 in January. Economists had forecast a score of -10.3.

UK employment increased further in the three months to December to set a fresh record, while joblessness remained unchanged, indicating the resilience of the labor market amid the uncertainty surrounding Brexit and the general election.

The number of employed rose 180,000 from the previous three months, figures from the Office for National Statistics showed on Tuesday, which exceeded the 145,000 growth economists had forecast.

The employment rate rose by 0.4 percentage points to a record high of 76.5%.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT