Investing.com - European stocks fell on Friday, as central bank policy decisions failed to reassure investors over the outlook for global economic growth, while investors remained cautious ahead of the release of U.S. employment data for indications of the strength of the country's economic recovery.
During European early afternoon trade, the EURO STOXX 50 dropped 0.63%, France’s CAC 40 declined 0.44%, while Germany’s DAX 30 fell 0.43%.
Market sentiment came under pressure after European Central Bank President Mario Draghi stated on Thursday that the economic outlook faces downside risks, adding that indicators for the second quarter point to weakening growth in the euro zone.
Draghi said that there was probably a "renewed weakness in economic growth" in the last three months, with "heightened uncertainty”. Draghi also refused to speculate on the chances of a third round of Long Term Refinancing Operations, in which provides cheap loans to European banks in an attempt to encourage them to lend.
The comments came after the central bank cut its benchmark interest rate to a record low 0.75% in July, in a bid to bolster faltering growth in the region.
Meanwhile, additional stimulus measures announced by the Bank of England and the People's Bank of China led investors to think that economic growth in those regions remained under strong pressure.
Financial stocks were sharply lower, led by Spanish lenders BBVA and Banco Santander, down 4.91% and 2.08% respectively, and closely followed by Italy's Unicredit, with shares tumbling 1.49%. Earlier Friday, HSBC downgraded BBVA to neutral from overweight.
France's two biggest lenders, BNP Paribas and Societe Generale, contributed to losses, as shares dropped 0.95% and 0.81%, while Germany's Deutsche Bank and Commerzbank also declined 0.49% and 1.31% respectively.
Auto stocks were also on the downside, erasing Thursday's sharp gains, as shares in Peugeot, Europe’s second-largest carmaker, tumbled 5.97% after the company said first-half sales declined to 1.62 million trucks from 1.86 million a year earlier, as demand slumped in European markets.
Germany's BMW saw shares plunge 3.30%, while Italian company Fiat retreated 1.53%.
In London, FTSE 100 fell 0.13%, after data showed that producer price inflation in the U.K. declined slightly more-than-expected in June.
Aviva was one of the session's top gainers, with shares surging 3.14%, on reports the insurance company stepped up the sale of part of its stake in Dutch counterpart Delta Lloyd, a day after unveiling a major restructuring plan, which includes job cuts and the sale of 16 businesses.
Meanwhile, financial stocks were mixed. Shares in HSCB Holdings climbed 0.75%, while Lloyds Banking, Barclays and the Royal Bank of Scotland declined 0.03%, 0,15% and 1,57% respectively.
On the downside, mining giants Rio Tinto and BHP Billiton tumbled 1.24% and 0.60%, while copper producers Xstrata and Kazakhmys dropped 0.87% and 1.58%.
Elsewhere, British construction and services company Carillion dove 5.25% after it was downgraded to sector perform from outperform at RBC Capital Markets.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.15% loss, S&P 500 futures signaled a 0.17% decline, while the Nasdaq 100 futures indicated a 0.16% fall.
Also Friday, official data showed that German industrial production rose 1.6% in May, beating expectations for a 0.2% increase and following a 2.1% fall the previous month.
Later in the day, the U.S. was to publish reports on nonfarm payrolls and the unemployment rate.
During European early afternoon trade, the EURO STOXX 50 dropped 0.63%, France’s CAC 40 declined 0.44%, while Germany’s DAX 30 fell 0.43%.
Market sentiment came under pressure after European Central Bank President Mario Draghi stated on Thursday that the economic outlook faces downside risks, adding that indicators for the second quarter point to weakening growth in the euro zone.
Draghi said that there was probably a "renewed weakness in economic growth" in the last three months, with "heightened uncertainty”. Draghi also refused to speculate on the chances of a third round of Long Term Refinancing Operations, in which provides cheap loans to European banks in an attempt to encourage them to lend.
The comments came after the central bank cut its benchmark interest rate to a record low 0.75% in July, in a bid to bolster faltering growth in the region.
Meanwhile, additional stimulus measures announced by the Bank of England and the People's Bank of China led investors to think that economic growth in those regions remained under strong pressure.
Financial stocks were sharply lower, led by Spanish lenders BBVA and Banco Santander, down 4.91% and 2.08% respectively, and closely followed by Italy's Unicredit, with shares tumbling 1.49%. Earlier Friday, HSBC downgraded BBVA to neutral from overweight.
France's two biggest lenders, BNP Paribas and Societe Generale, contributed to losses, as shares dropped 0.95% and 0.81%, while Germany's Deutsche Bank and Commerzbank also declined 0.49% and 1.31% respectively.
Auto stocks were also on the downside, erasing Thursday's sharp gains, as shares in Peugeot, Europe’s second-largest carmaker, tumbled 5.97% after the company said first-half sales declined to 1.62 million trucks from 1.86 million a year earlier, as demand slumped in European markets.
Germany's BMW saw shares plunge 3.30%, while Italian company Fiat retreated 1.53%.
In London, FTSE 100 fell 0.13%, after data showed that producer price inflation in the U.K. declined slightly more-than-expected in June.
Aviva was one of the session's top gainers, with shares surging 3.14%, on reports the insurance company stepped up the sale of part of its stake in Dutch counterpart Delta Lloyd, a day after unveiling a major restructuring plan, which includes job cuts and the sale of 16 businesses.
Meanwhile, financial stocks were mixed. Shares in HSCB Holdings climbed 0.75%, while Lloyds Banking, Barclays and the Royal Bank of Scotland declined 0.03%, 0,15% and 1,57% respectively.
On the downside, mining giants Rio Tinto and BHP Billiton tumbled 1.24% and 0.60%, while copper producers Xstrata and Kazakhmys dropped 0.87% and 1.58%.
Elsewhere, British construction and services company Carillion dove 5.25% after it was downgraded to sector perform from outperform at RBC Capital Markets.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.15% loss, S&P 500 futures signaled a 0.17% decline, while the Nasdaq 100 futures indicated a 0.16% fall.
Also Friday, official data showed that German industrial production rose 1.6% in May, beating expectations for a 0.2% increase and following a 2.1% fall the previous month.
Later in the day, the U.S. was to publish reports on nonfarm payrolls and the unemployment rate.