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European Markets Close Mostly Lower As Stocks Tumble In Final Hour

European markets ended lower on Friday, with stocks giving up early gains following a sell-off in the final hour, as the mood turned bearish due to worries about the economic impact of the coronavirus pandemic.

A preliminary flash estimate published by Eurostat that showed the euro area economy contracted at the fastest pace on record in the second quarter amid the coronavirus pandemic hurt sentiment.

In the U.K., Prime Minister Boris Johnson announced the country will slow down its reopening efforts. According to reports, several parts of northern England re-imposed some lockdown measures after new coronavirus cases rose sharply.

The mood was positive early on in the session thanks to encouraging earnings updates from U.S. technology majors Amazon, Apple, Alphabet and Facebook. But stocks fell in the final hour and settled well off the day's highs.

The pan European Stoxx 600 slid 0.89%. The U.K.'s FTSE 100 declined 1.54%, France's CAC 40 tumbled 1.43% and Germany's DAX ended lower by 0.54%, while Switzerland's SMI shed 0.89%. In July, the DAX 30 shed about 0.5%, the FTSE 100 slid 1.5% and CAC 40 fell 1.4%.

Among other markets in Europe, Austria, Belgium, Denmark, Greece, Ireland, Netherlands, Portugal, Spain, Sweden and Turkey ended weak, while Czech Republic, Finland, Iceland, Norway, Poland and Russia closed higher.

In the U.K. market, IAG declined more than 7.5% after the owner of British Airways swung to a loss of €4.21 billion and announced plans to raise €2.75 billion in a capital.

BT Group slid 7.1%. EasyJet, TUI, Carnival, Whitbread, Rolls-Royce Holdings, Intertek Group, ITV, British American Tobacco, BP, BAE Systems, AstraZeneca, Meggitt, Vodafone and Royal Dutch Shell lost 2 to 6%.

On the other hand, Land Securities, 3i Group, Polymetal International, Hiscox, Fresinus, British Land Compan and Hargreaves Lansdown gained 2 to 4%.

In France, Renault plunged more than 7.5%, Vinci shed 6.2%, Legrand lost 5.6% and Safran declined 5%. Hermes International, Publicis Groupe, Saint Gobain, Valeo and Peugeot ended lower by 3 to 3.5%.

Engie shares moved up nearly 4.5% after the company announced a new review of its assets after reporting a drop in first-half sales and profits.

Worldline gained 2.9%, Capgemini advanced 2.2%, ArcelorMittal notched up 2% and Vivendi gained 1.8%, while Carrefour moved up 1.55%.

In the German market, Covestro, Continental, Volkswagen and Daimler lost 3 to 4.7%. Lufthansa, HeidelbergCement and BMW lost 2.6 - 4%, while Wirecard rose more than 4%, and Linde and Thysenkrupp both ended lower by 1.15%.

In economic news, first estimate from the statistical office Insee showed France's Gross domestic product fell by a record 13.8% sequentially in the second quarter of this financial year, following the first quarter's 5.9% decrease. Economic output was 19% lower than in the second quarter of 2019.

France's consumer price inflation accelerated to a five-month high in July, rising 0.8% on a yearly basis, faster than the 0.2% rise seen in June and economists' forecast of 0.3%.

Germany's retail sales grew at a faster-than-expected pace of 5.9% annually, following a 3.2% percent rise in May, data from Destatis showed. Sales were forecast to advance 3%.

UK house prices rose in July, defying expectations for further decline, survey data from the Nationwide Building Society showed on Friday. The house price index rose 1.5% year-on-year after a 0.1% fall in June. Economists had forecast a 0.3% drop. House prices rose 1.7% from June, when they fell 1.4%. Economists had expected a 0.1%. .

The euro area economy contracted at the fastest pace on record in the second quarter amid the coronavirus pandemic, preliminary flash estimate published by Eurostat showed Friday. Gross domestic product fell 12.1% on a quarterly basis, bigger than the 3.6% drop in the first quarter. This was bigger than the economists' forecast of 11.2% and was the sharpest decline seen since the series began in 1995.

Year-on-year, GDP was down 15% in the second quarter versus a 3.1% decline a quarter ago. GDP was expected to fall 13.9%.

Data from Federal Statistical Office showed Switzerland's retail sales rose a working-day adjusted 1.1% year-on-year in June. On a monthly basis, seasonally adjusted retail sales decreased 3.8% in June, while in nominal terms, retail sales rose 0.4% annually in June and fell 3.6% from a month ago.

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