Upgrade Now

Europe close: Stocks slip amid debt ceiling concerns

By Alexander Bueso

Date: Tuesday 23 May 2023

Europe close: Stocks slip amid debt ceiling concerns

(Sharecast News) - European shares were lower on Tuesday as talks on the US debt ceiling continued and survey data showed a slowdown in eurozone factory activity, while shares in Julius Baer fell on a poor update.
"With the clock continuing to tick down towards the US debt ceiling deadline of 1st June, and US policymakers no nearer to a deal, European markets are finding little inclination to move higher, with the DAX and CAC40 sliding back for the second day in a row," said Michael Hewson, chief market analyst at CMC Markets UK.

The pan-European index was down 0.60% at 466.10, alongside a dip of 0.40% to 16,152.86 on the German Dax while Spain's 0.41% to 9,267.0.

Overnight, US President Joe Biden and House of Representatives leader Kevin McCarthy held "constructive" talks.

"Debt ceiling talks are inching forward, but it's slow progress, and with uncertainty hanging in the air, gains on equity markets are being held back," said Hargreaves Lansdown analyst Susannah Streeter.

In economic news, the eurozone composite PMI output index fell from April's reading of 54.1 to 53.3 (consensus: 53.5), mainly driven by services as manufacturing stagnated.

The services sector Purchasing Managers' Index dipped from 56.2 to 55.9, while that for manufacturing fell from 45.8 to 44.6.

"In particular, we are inclined to see strength in the services PMIs partly as a reflecting of strong nominal activity, which does not necessarily reflect strength in real GDP," said Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics.

Separately, Eurostat reported that the euro area's current account surplus jumped from €24.3bn in seasonally adjusted terms in February to €31.6bn for March.

In equity news, Swiss private bank Julius Baer fell 7% in early trade after its quarterly results missed expectations.

Vivendi fell 4% on news that controlling shareholder Vincent Bollore sold shares in the French media group.

RS Group - formerly Electrocomponents - fell after it said trading over the first seven weeks of 2023/24 reflected "a slowing" in industrial growth, and pointed to continued weakness and aggressive competition in electronics.


Email this article to a friend

or share it with one of these popular networks:

Top of Page