EUROPE MARKETS: Europe Stocks Trade Lower As German Economy Heads Toward Recession

Date : 08/14/2019 @ 9:57AM
Source : Dow Jones News
Stock : Admiral Group Plc (ADM)
Quote : 2126.0  30.0 (1.43%) @ 4:35PM
Admiral share price Chart

EUROPE MARKETS: Europe Stocks Trade Lower As German Economy Heads Toward Recession

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By Steve Goldstein, MarketWatch

Europe stocks traded lower on Wednesday after data showing the Continent's largest economy contracted and eurozone industrial production declined.

After halting a two-day losing run on Tuesday, the Stoxx Europe 600 declined 0.12% to 371.96, with banks including UniCredit (UCG.MI) and Danske Bank (DANSKE.KO) lower.

The U.K. FTSE 100 gained 0.1% to 7258.5, the German DAX fell 0.3% to 11714.89 and the French CAC 40 weakened 0.3% to 5346.88.

   U.S. stock futures  pointed to a decline for the Dow Jones Industrial Average   at the open. 

What's moving markets

The state of the global economy returned to focus a day after relief from the U.S. government delaying tariffs on Chinese consumer products.

Germany's economy shrank by 0.1% in the second quarter (http://www.marketwatch.com/story/german-economy-shrinks-amid-trade-concerns-auto-woes-2019-08-14), according to data released by Destatis, the statistics agency.

"The external backdrop is set to remain challenging due to persistent weakness in global demand amid re-escalated U.S.-China trade tensions and the increased likelihood of a no-deal Brexit," said Iaroslav Shelepko, an economist at Barclays. " Given varied risks, a gloomy global trade outlook and elevated uncertainty, we expect the economy to post another mild decline in the third quarter and therefore enter a technical recession even before Brexit and U.S.-E.U. trade risks are due to crystallize."

The economy in the eurozone as a whole rose 0.2%, Eurostat reported, with Spain's economy rising 0.5%, France's economy improving by 0.2% and Italy's economy staying flat.

Perhaps more concerning to markets was the 1.6% downturn in eurozone industrial production in June, as well as the softest Chinese industrial production growth in 17 years.

Focus stocks

Schindler Holding fell 4% as the elevator maker said markets may "slightly weaken over the remainder of the year" alongside a 2.8% decline in first-half operating profit. Its guidance for an annual net profit between 900 million and 940 million francs compares to consensus around 970 million francs. Rival ThyssenKrupp (TKA.XE) fell 3.4%.

Straumann Holding (STMN.EB) shares rose 3.3% as first-half earnings for the dental implant maker came in ahead of forecast and its sales guidance was upgraded.

Admiral Group (ADM.LN) shares advanced 4% as the British insurer reported a 4% rise in first-half pretax profit and an increase in its dividend.

Drugmaker Sanofi (SAN.FR) saw its shares rise 2% as UBS upgraded the company to buy from neutral, saying the pipeline of drugs "looks lackluster" but isn't empty, and that it's underperformed rivals like Novartis (NOVN.EB) , Roche (ROG.EB) and Johnson & Johnson (JNJ) .

 

(END) Dow Jones Newswires

August 14, 2019 05:42 ET (09:42 GMT)

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