PARIS: European shares closed off their day’s highs on Wednesday on growing evidences of slowing economic activity in the continent, while strong gains in drugmaker Roche boosted the Swiss stock index to a one-week high.
The pan-European STOXX 600 closed 0.4% higher, after gaining as much as 0.8% to a one-week high intraday.
A survey showed deeper-than-expected downturn in euro zone business activity this month in a broad-based fall, particularly in Europe’s largest economy Germany, although prompting traders to firm up bets that the European Central Bank would pause hiking rates in September.
“Having bad economic numbers is never a good scenario, even if it means central banks might go a bit easier,” said Michael Field, European Equity Strategist at Morningstar.
Figures showed euro zone consumer confidence fell by 0.9 points in August from July. The benchmark STOXX 600 is set for its worst monthly decline this year. It has underperformed US benchmark S&P’s 500 over 15% year-to-date advance with a near 7% upmove, on concerns over weakening economic outlook for euro zone and major importer China and rising bond yields on fears of rates remaining higher for longer globally. “We need something solid like if some of Europe’s major economies can avoid recession, although a big question, but beyond that, there’s not much that can inject a boost of optimism into markets to bring us back to higher levels,” Field added.
Energy stocks dropped 1.1% tracking lower crude oil prices, while Puma, Adidas and JD Sports Fashion dropped between 3.3% and 5.4%, tracking US-based Foot Locker’s lower annual forecasts on weaker demand amid still-high inflation.
Meanwhile, the Swiss Market Index added 0.9%, with Roche jumping 3.8% after inadvertently publishing positive lung cancer drug trial data from an interim analysis, although more data will be needed to confirm efficacy.
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