European equity markets retreated in today’s trading session, tracking sharp losses in the US and Asian equity markets as risk appetite remained limited. The CAC, DAX and the London benchmark equity index declined between 0.35% and 0.8%, while the euro rallied against the US dollar, eyeing the 1.40 level.
On the macroeconomic front, the Eurozone’s retail sales increased unexpectedly by 0.3% in March, beating estimates of -0.2% drop, while the Eurozone’s Markit Services PMI index was reported at 53.1 in April, in line with expectations.
In the UK, the Markit/CIPS services PMI index rose to 58.7 in April compared to 57.6 in March, driving Sterling even higher towards a 5-year high, at 1.6996 against the US dollar.
However, it seems that fairly tepid corporate earnings results weighed on market sentiment in today’s trading session, overshadowing the robust Markit Services PMI figures. Barclays led the table lower after reporting a 5% decline in its Q1 2014 profits, ending the session down by 5.22%. RBS and Lloyds also posted sharp losses, retreating by 1.96% and 1.4%, respectively.
Pharmaceutical companies Shire and AstraZeneca also declined by 3.12% and 2.7%, respectively, as the prospect of a takeover of AstraZeneca by Pfizer faded.
Tomorrow, market participants will be keeping an eye on the release of the German industrial orders as well as US consumer credit. In the meantime, Sterling continues its strong rally against the US dollar.