European markets sold off on Friday, as sentiment soured during a largely quiet session.
Major European stock indices opened slightly higher on Friday but fell as the day wore on.
The slide came despite better than expected economic data across the Eurozone and UK.
Closely watched private sector surveys released on Friday morning showed the Eurozone economy was still shrinking in June but only just. The PMI data was better than analysts had forecast and economists at Barclays said the numbers were a cause for “cautious optimism.”
However, activity in the markets was largely subdued by the closure of stock markets in the US due an early national Independence Day holiday.
“Given it’s a holiday in the US, we’d normally say it should be a fairly uneventful day ahead however that could depend on what happens with the latest virus data,” Deutsche Bank strategist Jim Reid wrote in a note to clients.
“Although it was a decent (half) day again for risk yesterday [Thursday, 2 July], equities did close well off their highs in the US after the latest virus numbers showed a tick up in deaths in Florida — 67 and the most in a month.”
The US set a new record for daily confirmed COVID-19 cases on Thursday (2 July), surpassing the record set just a day before. Over 55,000 new cases were announced on Thursday across the country, according to the Washington Post.
Asian markets rallied overnight. China’s Shanghai Composite (000001.SS) climbed 1.9%, the Shenzen Component (399001.SZ) rose 1.2%, the Hong Kong Hang Seng (^HSI) rose 1.1%, and Japan’s Nikkei (^N225) improved by 0.7%.
Chinese exchanges were boosted by better-than-expected survey data from the country’s service sector. Caixin’s Services PMI came in at 58.4, against a forecast of 53.2. PMIs are given on a scale of 0 to 100, with anything above 50 signalling growth and below marking contraction.
The data marked the strongest growth for the Chinese service sector in a decade and boost hopes of a continued swift rebound for the country’s economy.