European equity markets extended losses today, tracking declines across the US and Asian equity markets, due to limited risk appetite. The CAC, DAX, IBEX and the London benchmark index retreated between 0.2% and 1.2%, while the euro rebounded strongly to trade above 1.38 against the US dollar.
On the macroeconomic front, UK manufacturing and industrial output data was fairly bullish but failed to provide any well-needed support to the London equity market. Industrial output rose strongly by 0.9% in February against expectations of a modest 0.3% rise. Furthermore, manufacturing output increased by 1% in February, beating analysts’ estimates. Following the optimistic UK data, the sterling rebounded strongly and rose above 1.67 against the US dollar, verifying signs of improvement in the UK economy.
In commodities, base metals and crude oil prices rebounded, in a correction higher. Brent futures front month rose above $106 per barrel, while LME Copper retested the 6680 area and Aluminium was back to the $1820-$1835 range.
In London, heavy losses in technical and financial stocks offset gains in mining companies. Rio Tinto and Antofagasta gained 2.48% and 2.23%, respectively, while Sport Direct dragged the index lower after retreating more than 9% following a Bloomberg report that the company’s founder Mike Ashley cut its stake.
Tomorrow, investor attention will turn to the release of the German imports and exports as well as US wholesale inventories data.