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European Shares Subdued On Fed's Hawkish Talk

stockmarkets aug20 18jun21 lt

European stocks were broadly lower on Friday, with a hawkish policy outlook from the U.S. Federal Reserve and signs of credit tightening in China weighing on markets.

The pan European Stoxx 600 slipped 0.1 percent to 458.84 after closing 0.1 percent lower on Thursday.

The German DAX eased 0.2 percent and the U.K.'s FTSE 100 dropped half a percent while France's CAC 40 index was up 0.2 percent.

Banks underperformed as 10-year Treasury yields fell by nearly 3 bps to 1.475 percent, coming back to levels seen going into the Fed meeting earlier in the week.

HSBC Holdings, Deutsche Bank, Credit Agricole and BNP Paribas dropped 1-2 percent.

BP Plc fell 1.5 percent, Total SE gave up 1.9 percent and Royal Dutch Shell lost about 2 percent as oil extended losses for a second straight session on dollar strength.

Miners Anglo American, Antofagasta and Glencore were modestly lower as copper headed for its biggest weekly loss since March 2020.

Tesco, Britain's biggest retailer, lost 2.5 percent after it reported a sharp slowdown in underlying U.K. sales growth in its first quarter.

Inchcape shares jumped 3.8 percent after the automotive distributor delivered a better-than-expected performance in the first half and said full-year pre-tax profit will be "significantly ahead" of market consensus.

Irish food company Kerry advanced 1.8 percent. The company has agreed to sell its Meats and Meals business in the U.K. and Ireland to Pilgrim's Pride for €819m.

Danish rare disease company Orphazyme AS nosedived 62 percent after it failed to win support from the U.S. health regulator for its arimoclomol drug.

German chemical distribution company Brenntag AG advanced 1.7 percent after raising its operating EBITDA forecast for the 2021 financial year.

In economic releases, the euro area current account surplus totaled EUR 23 billion in April versus EUR 18 billion surplus in the previous month, the European Central Bank reported.

The visible trade surplus widened to EUR 27 billion from EUR 24 billion, while the surplus on services trade held steady at EUR 8 billion.

U.K. retail sales dropped unexpectedly in May after a sharp growth in April when retail restrictions were eased, data from the Office for National Statistics revealed.

Retail sales dropped 1.4 percent month-on-month in May, reversing a 9.2 percent rise in April and confounding expectations for an increase of 1.6 percent.

On a yearly basis, the retail sales volume growth moderated to 24.6 percent in May from 42.4 percent a month ago. This was also slower than the expected expansion of 29 percent.

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