European Markets Finished Mostly Lower As Investors Turn Cautious

01.12.16 18:17

VIENNA (dpa-AFX) - The majority of the European markets ended Thursday's session in the red, after hitting three-week highs in the previous session.

Banks stocks turned in another solid performance and energy stocks extended their gains after yesterday's OPEC agreement.

However, with crude oil prices surging back above $50 a barrel, shares of consumer goods companies were hit by inflation concerns. Gold stocks were also under pressure as the appetite for safe havens has waned.

The OPEC meeting in Vienna yesterday resulted in the cartel's first agreement to limit production since 2008. OPEC plans to reduce oil production by about 1.2 million barrels to 32.5 million barrels a day.

Investors also adopted a more cautious stance ahead of some key events. The highly anticipated U.S. jobs report for November is due to be released tomorrow, while the Italian referendum and elections in Austria will take place this weekend.

The pan-European Stoxx Europe 600 index weakened by 0.60 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.68 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.63 percent.

The DAX of Germany dropped 1.00 percent and the CAC 40 of France fell 0.39 percent. The FTSE 100 of the U.K. declined 0.45 percent and the SMI of Switzerland finished lower by 1.22 percent.

In Frankfurt, Bayer dropped 2.04 percent and Merck KGaA weakened by 2.30 percent.

Deutsche Bank increased 1.82 percent and Commerzbank added 2.30 percent.

In Paris, BNP Paribas climbed 2.04 percent and Societe Generale rose 0.95 percent. Credit Agricole also finished higher by 0.94 percent.

Technip gained 1.36 percent and Total added 0.23 percent.

In London, Rio Tinto advanced 1.27 percent. The mining giant said it is cooperating with inquiries from the relevant authorities relating to the impairment included in its 2012 accounts in respect of Rio Tinto Coal Mozambique.

Glencore increased 1.52 percent. The company plans to reinstate its dividend next year after completing an asset sale and reducing its debt.

BP gained 2.31 percent after Credit Suisse upgraded its rating on the stock to "Outperform."

Royal Dutch Shell finished higher by 2.32 percent and Tullow Oil surged 5.91 percent.

Shares of Daily Mail & General Trust jumped 2.95 percent. The publisher behind the Brexit-backing tabloid reported higher pretax profit for the year to end-September, despite booking higher exceptional costs than originally guided.

TalkTalk sank 4.51 percent after JP Morgan Cazenove downgraded its rating on the stock.

Healthcare company Elekta dropped 1.31 percent in Stockholm after releasing its interim earnings report.

The Eurozone manufacturing activity expanded at the fastest pace in 34 months in November, final data from IHS Markit showed Thursday. The final Purchasing Managers' Index rose to 53.7 in November from 53.5 in October. The score was unchanged from the flash estimate.

Eurozone unemployment rate declined to the lowest in more than seven years in October, reflecting strong momentum in the labor market despite weak economic growth.

The jobless rate dropped to 9.8 percent in October from a revised 9.9 percent in September, Eurostat reported Thursday. This was the lowest since July 2009. Economists had expected the rate to remain unchanged at September's initially estimated 10 percent.

British manufacturing sector expanded for the fourth straight month in November, but the pace of growth slowed unexpectedly, as a weaker currency drove up prices.

The Markit/CIPS Purchasing Managers' Index, or PMI, fell to 53.4 from 54.2 in October and September's 27-month high, survey results from IHS Markit showed Thursday. A reading above 50 suggests growth in the sector. Economists had forecast a higher score of 54.4.

U.K. house prices increased at a slower pace in November, the Nationwide Building Society said Thursday. House prices grew 4.4 percent year-on-year in November, slower than the 4.6 percent increase seen in October.

China's manufacturing sector expanded at a slower pace in November on softer growth in new orders and production, data from IHS Markit showed Thursday.

The Caixin manufacturing Purchasing Managers' Index fell more-than-expected to 50.9 in November from a 27-month high of 51.2 in October. The reading was expected to drop to 51.

Meanwhile, the official PMI rose unexpectedly to 51.7 from 51.2 in October. The score was forecast to fall to 51.

A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report on Thursday showing that first-time claims for U.S. claims climbed to a five-month high in the week ended November 26th.

The report said initial jobless claims rose to 268,000, an increase of 17,000 from the previous week's unrevised level of 251,000. Economists had expected jobless claims to inch up to 253,000.

Indicating a faster rate of growth in U.S. manufacturing activity in the month of November, the Institute for Supply Management released a report on Thursday showing a bigger than expected increase by its index of manufacturing activity.

The ISM said its purchasing managers index climbed to 53.2 in November from 51.9 in October, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 52.3.

Reflecting a jump in spending on private construction, the Commerce Department released a report on Thursday showing that U.S. construction spending increased in line with economist estimates in the month of October.

The report said construction spending climbed 0.5 percent to an annual rate of $1.173 trillion in October from the revised September estimate of $1.167 trillion.

Copyright RTT News/dpa-AFX


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