European Markets Pull Back On Weak Economic Data

The majority of the European markets ended Thursday's session in negative territory. The markets were dragged lower by a series of disappointing economic reports. Several purchasing manager surveys showed signs of an unexpected slowdown in April, reflecting weaker rates of expansion in France and Germany.

Economic recovery in the euro area is firming and inflation expectations are almost in sync with the central bank's aim, and only a combination of monetary policies and structural reforms can help sustain this cyclical improvement, the European Central Bank Chief Economist Peter Praet said on Thursday.

"The incoming data suggest that the ECB's measures are now gaining traction. The recovery is firming, and inflation expectations seem to be moving towards values more consistent with our aim," Praet said in a speech in Berlin, text of which was published on the ECB website.

Investors are looking forward to Friday's meeting of Eurozone officials in Latvia. However, a breakthrough in the negotiations on Greece currently appears unlikely.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased by 0.80 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.42 percent.

The DAX of Germany declined by 1.21 percent and the CAC 40 of France fell by 0.62 percent. The FTSE of the U.K. climbed by 0.36 percent, but the SMI of Switzerland finished lower by 0.21 percent.

In Frankfurt, Daimler declined by 1.43 percent. The company's Mercedes-Benz has been fined 350 million yuan or $56.49 million by a Chinese pricing regulator for violating anti-monopoly laws and price fixing of vehicles.

Deutsche Bank finished lower by 0.33 percent. The lender said it would be profitable in the first quarter and will report near record revenues after setting aside 1.5 billion euros for litigation costs.

Fresenius dropped by 2.57 percent and Fresenius Medical Care lost 1.26 percent.

In Paris, Peugeot decreased by 2.75 percent and Renault fell by 0.75 percent.

Shares of Michelin surged by 6.48 percent.

In London, WPP dropped by 1.50 percent. The advertising company maintained its guidance for the full year despite slowing sales growth last quarter.

Taylor Wimpey rose by 0.85 percent, after it provided a trading update.

Antofagasta increased by 4.67 percent, after it agreed to sell its water utility business Aguas de Antofagasta.

Anglo American advanced by 4.73 percent. The company announced that it will cut diamond production this year.

Novartis climbed by 0.40 percent in Zurich, after posting better-than-expected first-quarter earnings. The company also confirmed its guidance for operating earnings and sales growth for the year.

Ericsson sank by 8.16 percent in Stockholm, after the telecoms equipment maker posted disappointing first-quarter earnings, dragged by lower U.S. network spending.

Eurozone private sector growth pulled back from March's 11-month high in April as concerns over Greece crisis started to weigh on economic activity despite the boost from the European Central Bank's quantitative easing. The flash composite output index fell unexpectedly to 53.5 in April from 54 in March, according to the purchasing managers' survey results published by Markit Economics. The expected score was 54.4.

Germany's private sector growth moderated at the start of the second quarter, survey data from Markit Economics showed Thursday. The flash composite output index fell to 54.2 in April from an eight-month high of 55.4 in March. The latest index reading was still the second-strongest since last September.

The French private sector growth weakened to near stagnation in April as manufacturing continued to shrink, flash survey data from Markit showed Thursday. The flash composite output index fell to 50.2 in April, a 3-month low, from 51.5 in March, signaling a fractional increase in output.

Germany's consumer confidence is set to rise further to the strongest level since October 2001, survey data from the market research group GfK showed Thursday. The forward-looking consumer climate index rose to 10.1 points in May from 10 in April. This was its highest value since October 2001, when the indicator was at 11.0 points.

French manufacturing confidence improved more than expected in April to the highest level since August 2011, survey data from the statistical office Insee showed Thursday. The manufacturing confidence index rose to 101 in April from 99 in March. It was expected to rise to 100. This was the highest score since August 2011.

U.K. retail sales declined for the first time in six months in March on petrol sales, casting doubt over economic growth gaining strength at the start of the year. Retail sales including auto fuel unexpectedly dropped 0.5 percent on a monthly basis in March, reversing a 0.6 percent rise in February, data from the Office for National Statistics showed Thursday.

This was the first fall in six months and the biggest since January 2014. Economists had forecast a 0.4 percent rise for March.

Another report from the ONS showed that public sector net borrowing excluding interventions decreased by GBP 0.4 billion to GBP 7.4 billion in March. The expected level was GBP 7 billion.

Gross mortgage lending in the United Kingdom increased notably in March, data from the Council of Mortgage Lenders, or CML, showed Thursday. Total mortgage lending grew 21.0 percent in March from the previous month to EUR 16.5 billion. On an annual basis, lending increased by 7.0 percent.

China's factory activity moved further into negative zone in April, logging the weakest operating conditions in a year, flash estimate released by Markit Economics showed Thursday. The HSBC manufacturing Purchasing Managers' Index fell to 49.2 in April, a 12-month low, from 49.6 in March. It was expected to remain at 49.6.

First-time claims for U.S. unemployment benefits unexpectedly saw a modest increase in the week ended April 18th, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims edged up to 295,000, an increase of 1,000 from the previous week's unrevised level of 294,000. The modest uptick came as a surprise to economists, who had expected jobless claims to dip to 290,000.

After reporting a notable increase in new home sales in the U.S. in the previous month, the Commerce Department released a report on Thursday showing that new home sales pulled back by much more than expected in the month of March.

The report said new home sales plunged 11.4 percent to an annual rate of 481,000 in March after jumping 5.6 percent to a revised rate of 543,000 in February. Economists had expected new home sales to drop to an annual rate of 518,000 from the 539,000 originally reported for the previous month.

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