Europe close: Stocks moderately lower after soft China factory data
By Alexander Bueso
Date: Thursday 30 Sep 2021
(Sharecast News) - European stocks registered moderate losses on Thursday as investors digested weak China manufacturing survey data, renewing concerns about the state of the world's second largest economy.
But that wasn't the only thing on investors' minds.
"A rise in initial jobless claims has briefly stifled the dollar and treasury yield rise today," said IG chief market analyst Chris Beauchamp.
"The UK will also see a focus on jobs going forward, with the furlough scheme drawing to an end. Meanwhile, Biden hopes for progress on debt ceiling and infrastructure bill."
The pan-regional Stoxx 600 index drifted just 0.05% lower to 454.81, but Germany's Dax dropped 0.68% to 15,260.60 and the French Cac-40 was down by 0.62% at 6,520.01.
Britain's FTSE 100 surrendered early gains, slipping 0.31% to finish at 7,086.42 after data showed the UK economy grew more than initially estimated in the second quarter, according to figures released on Thursday by the Office for National Statistics.
The economy expanded at a quarter-on-quarter pace of 5.5% between April and June, up from a preliminary estimate of 4.8%.
This left GDP 3.3% below pre-pandemic levels, up from a previous estimate of 4.4% below.
Asia shares were mixed overnight as China's factory activity shrunk unexpectedly in September due to curbs on electricity use and rising prices for commodities and parts.
The official manufacturing Purchasing Managers' Index for September came in at 49.6, below expectations for a reading of 50.1. A PMI reading below 50 represents contraction while those above signify expansion.
Investors were also worried about reports that debt-laden property developer China Evergrande had missed a second bond repayment this week, prompting speculation the company would have to undergo a major restructure to get out from under its $305bn debt pile.
On a more positive note, French consumer spending rose by 1% in August from the previous month, after falling 2.4% in July.
German unemployment fell in September, official figures showed, with the Labour Office reporting the number of people out of work falling by 30,000 in seasonally adjusted terms to 2.508 million.
In equity news, gambling operator Kindred Group fell 7.57% as the company withdrew its application to join the Netherlands KOA online gambling marketplace, due to launch on Friday, after choosing to observe a 'cooling-off' order as a prerequisite to applying for Dutch market licensing.
Airlines all fell sharply as 16 carriers said they would comply with European Union demands to improve practices over reimbursing passengers for flight cancellations in the wake of severe criticism of how many delayed payments during the Covid pandemic.
Lufthansa, Wizz Air, easyJet and British Airways owner IAG were all lower after agreeing to reimburse passengers in Europe for cancelled flights within seven days.
Shares in Swedish cloud communication services provider Sinch rose 3% to thre top of the Stoxx after the company agreed to buy cloud-based email delivery platform Pathwire in a cash-and-stock deal worth about $1.9bn.
Compatriot H&M dropped 3.4% after it reported a bigger-than-expected jump in quarterly pretax profit as shoppers returned to stores.
UK spirits maker Diageo gained after it forecast a boost to operating margins as people opt for premium brands.
British online fast-fashion retailer Boohoo tumbled 15% as it warned that freight inflation and higher wages for its distribution centre workers would impact full-year profit margins.
Belgian retailer Colruyt fell 9% after lowering its full-year guidance on Wednesday.
Virgin Money lost ground after saying it would close almost one-fifth of its branches and cut office space as customers increasingly move online during the pandemic.
Tritax Big Box fell as the company said it had raised around £300m in a placing, subscription and retail offer as it looks to accelerate its development plan.
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