Forexpros – European stocks were mixed on Thursday, after a flurry of weak data from the euro zone weighed on sentiment while the Federal Reserve disappointed investors by stopping short of announcing more aggressive monetary stimulus.
During European afternoon trade, the EURO STOXX 50 rose 0.18%, France’s CAC 40 edged down 0.11%, while Germany’s DAX 30 fell 0.11%.
Investor confidence weakened after the Federal Reserve announced Wednesday that it is extending the current bond buying program until the end of the year, disappointing expectations for more aggressive measures, following a recent string of weak U.S. data.
Sentiment was also hit after data showed that manufacturing activity in the euro zone contracted at the fastest pace since June 2009 this month, while manufacturing activity in Germany slowed to the lowest level in three years in June.
Financial stocks turned broadly higher after Spain’s Treasury sold slightly more than the targeted amount of EUR2 billion at an action of government debt, although borrowing costs rose sharply.
Italian lender Unicredit led gains, up 1.89%, and was closely followed by Spain’s Banco Santander, with shares surging 1.59%, while France’s BNP Paribas and Societe Generale rose 0.88% and 0.22%.
Germany’s two biggest lenders, Deutsche Bank and Commerzbank, were also on the upside, as shares advanced 1.14% and 1.69% respectively.
Spain’s largest phone company Telefonica also erased earlier losses, climbing 0.44%, after Moody’s Investor Service cut its credit rating by one notch to Baa2. Moody’s said the company’s credit rating could be reduced further as Spanish consumers are currently scaling back spending and as the government’s credit profile worsens.
Cyclical stocks remained broadly lower however, weighed by disappointing manufacturing activity data from China, showing a contraction for the eighth straight month. France-based steel company ArcelorMittal saw shares tumble 1.77%, while energy companies continued to tumble, led by Spain’s Repsol, down 3.41%.
In London, commodity-heavy FTSE 100 fell 0.33%, weighed by sharp losses mining and energy stocks.
Mining giants Rio Tinto and Bhp Billiton dropped 0.78% and 1.47% respectively, while Glencore saw shares plunge 2.54%. Copper producers also remained broadly lower, with Xstrata and Kazakhmys plummeting 2.27% and 1.52%.
Oil and gas major Anglo American was also one of the session’s top losers, plunging 2.34%, while BP saw shares slump 2.14%.
Elsewhere, shares in Invensys sank 16.38% after British engineer said that preliminary discussions about a takeover with third parties including Emerson Electric had ended with no offer.
Meanwhile, U.K. lenders erased losses, tracking their European counterparts higher. Shares in Lloyds Banking surged 1.92% and the Royal Bank of Scotland climbed 0.59%, while Barclays added 0.41%.
In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.06% decline, S&P 500 futures signaled a 0.08% drop, while the Nasdaq 100 futures indicated a 0.08% loss.
Investors also remained cautious ahead to the outcome of an audit of Spanish banks later in the day, amid concerns that the results could show that a EUR100 billion bailout for the country’s banks agreed earlier this month would not be large enough.
Later in the day, European Central Bank head Mario Draghi was to speak.
The U.S. was to produce government data on unemployment claims, followed by preliminary data on manufacturing activity and an industry report on existing home sales. The country was also to release data on manufacturing activity in the Philadelphia area.
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