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Europe close: Stocks slip amid softer-than-expected service sector readings

By Alexander Bueso

Date: Monday 05 Jun 2023

Europe close: Stocks slip amid softer-than-expected service sector readings

(Sharecast News) - European shares slipped on Monday as investors digested weaker than expected services sector activity on either side of the Pond.
"Aside from tech stocks, which seem to go up regardless of the prevailing market conditions, indices have struggled to make headway and keep up the pace from Friday's rally," said IG chief market analyst Chris Beauchamp.

"Today's ISM index weakness [in the States] has taken some of the shine off Friday's jobs data, though stocks overall have held on to their gains from last week. The focus now shifts to the Fed, but with a blackout period now descending markets will be mostly on their own this week."

The pan-regional Stoxx 600 was off by 0.48% to 459.93, with all regional bourses lower alongside.

France's CAC 40 fell the most, ending down 0.96% to 7,200.91, while Italy's FTSE Mib gave back 0.78% to 26,856.85.

Asian shares were higher, lifted by Friday's rally on the back of US payrolls data and a pickup in China's services activity in May.

In the background, major producer Saudi Arabia said it would cut its oil output by 1.0m barrels a day from July.

On the economic front, Eurozone investor sentiment deteriorated in June as worries about the German economy weighed, according to data released on Monday.

The Sentix investor sentiment index fell to -17.0 in June from -13.1 in May, hitting its lowest level since January and missing consensus expectations of -15.1.

Eurozone services activity slowed in May, according to final survey readings released on Monday.

The final S&P Global composite purchasing managers' Index (PMI) fell to 52.8 in May from April's 54.1, above the 50 mark separating growth from contraction, but lower than a flash estimate of 53.3.

A PMI covering the services sector dropped to 55.1 from April's one-year high of 56.2, below the 55.9 flash reading.

Weaker-than-expected PMI readouts from Italy and Spain, combined with downward revisions to the French and German PMIs, pulled the overall number lower.

In equity news, shares in Viaplay crashed by 60% after the Swedish entertainment provider said CEO Anders Jensen had quit and the group downgraded its outlook for 2023.

Goldman Sachs Asset Management made a $600m bid for Norwegian aquaculture service group Froy, sending its shares higher by 3%.

Novo Nordisk said it started talks to buy a controlling stake in French medical device designer Biocorp.


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