London Stocks End Down; China GDP Next Big Hurdle

FTSE 100 ends 1% lower at 5608.25 after a downbeat session. The weakness in equities partly reflects the disappointment that Wednesday’s FOMC minutes failed to signal the launch of further quantitative easing, say traders. Ashmore Group is the biggest faller, slumping 6.7% after a weaker-than-expected trading statement. There’s little of note on Friday’s UK macro calendar, just ONS construction output at 0830 GMT. Of particular interest, though, will be China’s 2Q GDP data, to be released at 0200 GMT. If the print disappoints, as feared, mining stocks will likely tumble. Also, results from US banking giant JPMorgan Chase will be eyed.

Frankfurt Stocks End Slightly Lower

DAX closes 0.5% lower at 6419.35, as investors react to Wednesday’s FOMC minutes which provided no clear signals of further economic stimulus from the Fed, an analyst says. A strong fall in US jobless claims fails to offset this disappointment and lift investor sentiment, a trader adds. Losses are led by financial stocks with Commerzbank down 2.6%, Deutsche Bank off 2.0% and Deutsche Boerse 1.8% lower. SAP defies the market trend, ending 2.7% ahead after announcing a stronger-than-expected 2Q performance. Friday, US PPI data for June are due at 1230 GMT with the University of Michigan confidence index at 1355 GMT.

Paris Stocks Close Slightly Lower

CAC-40 closes 0.7% lower at 3135.18 as investors remain concerned about the French economic outlook, says a Paris-based trader. “[They] lack conviction,” says the trader, highlighting that the positive release on US jobless claims, which fell to their lowest level in more than four years, was not enough to convince investors. CapGemini drops 2.9% after Credit Suisse initiates coverage at underperform. Carrefour climbs 7% after confirming analysts’ views on operating profit and posting a smaller-than-expected decline in 2Q revenue. Peugeot ends 1.7% lower after announcing job cuts in France.

Zurich Stocks Close Slightly Lower

SMI ends 0.4% lower at 6147.57, amid new concerns about global growth during a jittery session, a trader says. “The market changes direction every day, there isn’t a single sector that is constantly in red or in black,” he says. The biggest losers are Richemont and Swatch, down 4.2% and 4% respectively on worries of a slowdown in key market China, with GDP data due Friday. Actelion falls 1.8% after announcing job cuts and an R&D revamp. Financials also suffer with Credit Suisse down 1.9%, UBS off 1% and Julius Baer 0.9% lower. Among defensives, Novartis ends 0.1% higher and Nestle flat. Friday, attention turns to the release of Swiss PPI/import data for June.

Nordic Stocks End Session Firmly Lower

Nordic equity markets end lower as fears mount ahead of Friday’s release of Chinese GDP numbers, turning investor sentiment sour. Also, disappointment lingers from Wednesday’s FOMC minutes which carried no clear hint of further stimulus. OMXN40 ends 1% lower at 961.05, OBX down 1.1% at 376.26. In individual stocks, DNB closes 3.1% higher after posting a stronger-than-expected rise in 2Q net profit. Teliasonera, announcing impairments for its Norwegian and Lithuanian operations, ends 1.9% lower.

Amsterdam Stocks End Slightly Lower

AEX ends 0.4% lower at 311.42, with investors showing disappointment over Wednesday’s FOMC minutes which gave no signs that the Federal Reserve plans further economic stimulus. This belief is strengthened after the US jobless claims print shows a bigger drop than expected. Akzo Nobel is the biggest gainer, ending 1.8% higher after an HSBC upgrade to overweight.

Milan Stocks End Session Sharply Lower

FTSE Mib ends 2% lower at 13,584, the worst performance among continental Europe’s indices after Madrid, as investors – nervous about the prospects of the global economy – await new data on China’s economy, out Friday. Giorgio Squinzi, head of the Confindustria business lobby, hasn’t helped sentiment, saying he expects Italy’s GDP to fall more than 2.4% this year. UniCredit ends down 2.4%, Intesa Sanpaolo off 1.7%. Telecom Italia tumbles 6.5% on concerns about Brazil’s economy. Mediaset slips 3.8% after a Societe Generale downgrade and a cut in earnings estimates by Equita Sim. Impregilo loses 1.6% after shareholders postpone until July 17 a vote on a motion to change its entire board.

Madrid Stocks Close Sharply Lower

IBEX-35 ends 2.6% lower at 6630.1, the day after the Spanish government’s latest austerity move. Prime Minister Rajoy announced EUR65B in budget cuts Wednesday, including a VAT hike. “Raising taxes, hoping that this is going to bring more money, is a little foolish,” says Juan Rey, sales trader at Banco Sabadell. “I think the market would like to see more measures to cut spending.” Bankia is the biggest loser Thursday, off 9.6% on continued weakness at the battered bank. Iberdrola ends down 5.8% on coming electricity taxes. Supermarket DIA is the biggest gainer, up 1%.

Athens Stocks Close Firmly Lower

ASE ends 0.9% lower at 600.16, reacting to losses seen on core European markets after the US FOMC’s failure late Wednesday to deliver any clues on further easing. BBH believes QE3 remains on the table, but “the bar to using it remains very high.” Adding to the negative tone are data showing the Greek unemployment rate rising to a fresh record of 22.5%. Also Thursday, the government has begun putting together a plan to achieve savings worth EUR11.5B over 2013 and 2014. In individual stocks, the biggest fallers are Coca-Cola Hellenic, down 4.1%; Titan Cement, off 3.3%; and OPAP, losing 1.7%.

Prague Stocks Close Firmly Lower

PX ends 1.1% lower at 896.9 as local stocks track losses elsewhere in the region. “The most pressure was on banks, and selling on Erste was the most marked, in rather large volumes. Investors are reacting locally to negative sentiment on markets all around Europe,” a trader says, adding that Wednesday’s comments from the US Fed have heightened uncertainty. Erste ends down 2.5%, Komercni Banka off 1.3%. CEZ finishes 0.5% lower as investors take profit after a steady rise in the stock earlier this week.

StockMarketNews Research Team