Yahoo Finance European Stocks Lower; Economic Growth Worries Persist
By Peter Nurse
Investing.com - European stock markets traded lower Friday, ending a generally positive week on a cautious note amid concerns that growing Covid-19 cases will stunt economic growth.
At 3:50 AM ET (0850 GMT), the DAX in Germany traded 0.8% lower, the CAC 40 in France fell 0.8% and the U.K.'s FTSE index dropped 0.6%.
U.K. retail sales only grew 0.3% in December, weaker than expected, as retailers struggled to recover in the crucial holiday period from a partial coronavirus lockdown the previous month, marking a weak end to their worst year on record.
Additionally, the euro-zone composite PMI, which fell to 47.5 from 49.1 in December, suggested the region was struggling to show any economic growth in the first month of the new year.
This follows European Central Bank President Christine Lagarde warning Thursday that ever-increasing Covid-19 numbers and restrictive measures, such as lockdowns, to curb the spread of the virus could challenge the region’s economic outlook.
Lagarde also indicated more clearly than ever that the ECB would not use the full amount of its chief bond buying program if it doesn't need to.
European governments are having to cope with a surge in Covid-19 cases, with Britain, for example, posting a fresh record in daily deaths on Wednesday, for the second day running.
Equity markets have posted strong gains so far this week, reflecting relief over an orderly transition of power in the United States and strong expectations that U.S. stimulus will provide continued support for global assets.
In corporate news, Next (LON:NXT) stock fell 1.9% following a report that the U.K. retailer has withdrawn from the bidding for rival Top Shop on price considerations.
Siemens (DE:SIEGn) stock rose 4.1% after the German engineering company said the results for its fiscal first quarter were broadly ahead of expectations, and it would have to review its guidance
Also, PRISA (MC:PRS) stock rose 6.3% after Vivendi (PA:VIV) said it will buy a 7.6% stake in the Spanish media conglomerate.
Oil prices weakened Friday on concerns that a rise of Covid-19 cases in China, the world’s largest importer, will severely impact demand, given the reintroduction of restrictive measures.
Shanghai reported the first locally transmitted cases in two months on Thursday, while Beijing is now urging tens of millions of urban workers not to travel back to their largely rural families during the upcoming Lunar New Year holiday.
The U.S. Energy Information Administration is due to release its weekly inventory report on Friday, a couple of days later than usual, and follows the American Petroleum Institute recording the country’s crude inventories rising 2.6 million barrels earlier in the week.
U.S. crude futures traded 1.5% lower at $52.35 a barrel, while the international benchmark Brent contract fell 1.3% to $55.38.
Elsewhere, gold futures fell 0.2% to $1,861.40/oz, while EUR/USD traded 0.2% higher at 1.2180.
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