VIENNA (Alliance News) – The European markets endured a choppy trading session Wednesday, swinging between modest gains and losses over the course of the day. However, the markets turned definitively to the downside in late trading. The weak opening on Wall Street and the larger than expected build in US crude oil inventories weighed on investor sentiment.
The US EIA reported Wednesday that US crude inventories increased by 2.3 million barrels last week. Expectations had been for a build of only 900,00 barrels. Crude oil prices dropped to around USD45 a barrel after the report was released.
Gold and mining stocks extended their losses from the previous session. The overall strength of the US dollar has driven precious metal prices lower.
Meanwhile, bank stocks added to their gains from the prior session. Reports of a possible merger between German banking giants Commerzbank and Deutsche Bank helped to fuel the continued gains among financial stocks.
The pan-European Stoxx Europe 600 index weakened by 0.29%. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.25%, while the Stoxx Europe 50 index, which includes some major UK companies, lost 0.38%.
The DAX of Germany dropped 0.61% and the CAC 40 of France fell 0.43%. The FTSE 100 of the UK declined 0.58% and the SMI of Switzerland finished lower by 0.41%.
In Frankfurt, Commerzbank climbed 3.41% after German Manager Magazin reported that Deutsche Bank had in the past explored a possible merger with its German rival. Shares of Deutsche Bank rose 2.68%.
Bayer weakened by 1.18% and Merck KGgA lost 0.77%. Fresenius fell 1.03% and Fresenius Medical Care surrendered 0.97%.
In Paris, Bouygues advanced 1.08% after the industrial group confirmed its 2016 outlook after posting a narrower first-half loss.
Telecoms operator Iliad soared 4.14% on reporting a double-digit rise in underlying profit during the first six months of the year.
Biotechnology company bioMérieux jumped 8.21% after its first-half net consolidated income jumped 45% from last year.
Societe Generale increased 1.43% and Credit Agricole rose 2.38%. BNP Paribas also gained 0.56%.
In London, pub operator Punch Taverns advanced 2.36% after reporting a solid set of results for the 52 weeks to August 20.
Grafton Group plunged 9.95% after the building materials company warned of a challenging backdrop in UK merchant business.
Gold and mining stocks remained under pressure as precious metal prices continue to fall. Anglo American sank 4.61% and BHP Billiton dropped 4.86%. Fresnillo fell 4.97% and Antofagasta decreased 3.28%. Glencore declined 1.69% and Rio Tinto lost 2.11%. Randgold Resources also forfeited 2.85%.
Royal Dutch Shell weakened by 2.13% and BP fell 1.3%. Tullow Oil also surrendered 3.67%.
Molecular diagnostics developer MDxHealth climbed 2% in Brussels after signing a distribution agreement with Teva Pharmaceuticals.
Euro area inflation remained stable in August, flash estimate from Eurostat showed Wednesday. Inflation held steady at 0.2% in August, while economists expected the rate to rise marginally to 0.3%.
The euro area unemployment rate remained unchanged at the lowest level since July 2011, Eurostat reported Wednesday. The jobless rate held steady at 10.1% in July. Economists had forecast the rate to fall to 10%.
A measure of signaling the pace of growth in the euro area rose for the third straight month in August, though slightly, data from the Bank of Italy and think tank CEPR showed Wednesday.
The Eurocoin indicator virtually unchanged in August. It rose to 0.32 from 0.31 in July. In June, the reading was 0.29.
Germany’s retail sales increased at a faster-than-expected pace in July, data from Destatis showed Wednesday. Retail sales climbed a calendar and seasonally-adjusted 1.7% month-over-month in July, reversing a 0.6% drop in the previous month. That was well above the 0.5% rise expected by economists.
Germany’s unemployment declined more than expected in August, reports said citing data from the Federal Labor Agency on Thursday. The number of people out of work decreased by 7,000 in August from July. Economists had forecast a decline of 4,000.
Germany’s unemployment rate decreased slightly in July, the labor force survey published by Destatis showed Wednesday. The jobless rate fell to 4.2% in July from 4.3% in June. In the same period last year, the unemployment rate was 4.6%.
France’s EU harmonized inflation held steady in August, provisional estimate from the statistical office Insee showed Wednesday. The harmonized consumer price index rose 0.4% in August from a year ago, the same pace of growth as seen in July.
French consumer spending dropped unexpectedly in July, albeit marginally, figures from the statistical office INSEE showed Wednesday. Consumer spending fell 0.2% month-over-month in July, slower than June’s 0.8% decline. It was the fourth consecutive monthly decline. In contrast, economists had expected a 0.4% rise for the month.
Consumer confidence in the UK showed signs of life in August, the latest survey from GfK showed on Wednesday with an index score of -7. That beat forecasts for -8 and was up from -12 in July; that previous month had suffered an 11-point tumble in the wake of the Brexit vote.
UK house prices increased at the fastest pace in five months in August, the Nationwide Building Society reported Wednesday. House prices grew 5.6% year-on-year in August, following a 5.2% rise in July. This was the fastest growth in five months. Economists had forecast the annual growth rate to ease to 4.9%.
Private sector employment in the US increased roughly in line with economist estimates in the month of August, according to a report released by payroll processor ADP on Wednesday. ADP said the private sector added 177,000 jobs in August following an upwardly revised increase of 194,000 jobs in July.
Economists had expected employment to climb by about 175,000 jobs compared to the addition of 179,000 jobs originally reported for the previous month.
Chicago-area business activity grew at a notably slower rate in the month of August, according to a report released by MNI Indicators on Wednesday. MNI Indicators said its Chicago business barometer dropped to 51.5 in August after edging down to 55.8 in July.
Economists had expected the index to show a much more modest dip to 55.2.
Reflecting significant strength in the Western region, the National Association of Realtors released a report on Wednesday showing that pending home sales in the US rose by much more than expected in the month of July.
The report said the pending home sales index jumped by 1.3% to 111.3 in July from a downwardly revised 109.9 in June. Economists had expected the index to climb by 0.6%.
Copyright RTT News/dpa-AFX