PARIS: European stocks fell on Thursday as mixed economic data spurred worries about global growth and offset gains in interest rate-sensitive sectors, with France’s CAC 40 leading national declines.
The pan-European STOXX 600 index fell 0.5%, with sectors tracking healthcare, chemicals and personal goods all falling over 1%.
Economic worries continued to weigh on sentiment. German industrial orders rose more than expected in July, but euro zone retail sales slipped on an annual basis.
That, combined with some signs of weakening in the US labour market, kept investors cautious ahead of key US nonfarm payrolls data on Friday.
“The industrial orders were good news for Germany but everybody right now is focused on US job data ... tension in the market is growing higher into tomorrow’s US job report which is why we see a continued sell off in the US and European stock markets,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
France’s benchmark index slipped 0.9%, its third consecutive loss, as worries about a slowdown in top consumer China weighed on luxury stocks.
An index of luxury stocks dropped over 3%, with LVMH and Hermes International slumping 3.6% and 6.4%, respectively.
The selection of Michel Barnier, the EU’s former Brexit negotiator, as France’s prime minister helped lift some bank stocks and government bonds in hopes it would soothe the country’s political turmoil since President Emmanuel Macron called a snap election in June.
“Having a Prime Minister is a good sign and it’s going to calm nerves in the market, but this period of (political) uncertainty has damaged investor appetite for France,” Ozkardeskaya said.
Germany’s benchmark DAX index was flat. The country’s Ifo Institute said the economy was likely to stagnate this year, in contrast to previous forecasts of 0.4% growth. The rate-sensitive utility and real estate sectors were the top gainers, both up over 1% as investors continued to expect rate cuts this month from both the European Central Bank and the Federal Reserve.
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