European equities recover from earlier losses

Wednesday, May 07, 2014

European equity markets were fairly mixed in today’s trading session, as tepid economic data weighed on market sentiment. The CAC and DAX rebounded from earlier losses and finished on positive territory, while Spain’s IBEX and Italy’s FTSE MIB retreated by 0.5% and 1.3%, respectively. The London equity benchmark index managed to recover from earlier declines and ended the session fairly unchanged at 6796.

 

On the macroeconomic front, the German industrial orders fell unexpectedly by 2.8% in March, against estimates of a modest 0.3% increase. In the US, productivity also declined by 1.7% in Q1 2014 and labour costs increased by 4.2% in the same period.

German Factory Orders

GRIORTMM Index (Germany Manufact 2014-05-07 17-13-26

 

The fairly disappointing corporate earnings results from HSBC weighed on market sentiment and prompted investors to some profit taking in the UK banking sector. Lloyds retreated sharply by 2.56%, while HSBC and Barclays also posted sharp losses after falling by 1.44% and 0.94%, respectively.

In currencies, the euro managed to hold around 1.39 against the US dollar, despite the tepid German industrial data, while sterling has held strong near 1.696 against the dollar.

 

Tomorrow, investors will be watching closely for the release of UK housing prices data from RICS survey and Halifax, as well as interest rates decisions from Bank of England and the ECB. In the US, investors’ attention will switch to the weekly jobless claims figures.

  

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