Europe’s main stock markets closed narrowly mixed yesterday as disappointing US retail sales and unemployment data failed to lift sentiment. London’s FTSE 100 index of top companies edged up 0.06% to 6,843.11 points, while Frankfurt’s DAX 30 shed 0.11% to 9,938.70 points, and the CAC 40 in Paris slipped 0.02% to 4,554.40 points.
Madrid gained 0.12% while Milan shed 0.27%. “Markets in Europe traded with a negative tone today (Thursday) as concerns over Iraq spiked oil prices and better than expected European industrial production was tempered by weak US retail sales and jobless claims,” said CMC Markets analyst Jasper Lawler. Early on in the session sentiment had been hit by losses across Asia and on Wall Street on Wednesday after the World Bank cut its forecast for global economic growth.
“No doubt yesterday’s (Wednesday) surprisingly sharp downward revision to global growth has soured the mood somewhat leaving markets a bit vulnerable,” said Markus Huber, senior analyst at broker Peregrine & Black. “On both sides of the Atlantic, strong figures will be needed in order for markets to be able to resume their move to the upside and dispel concerns that economies are on the retreat again.” But retail sales and unemployment data out of the US failed to inspire investors.
The Commerce Department said May retail and food sales rose by just 0.3%, well below the 0.7% rise expected by analysts. However, the report also revised the estimate for April retail sales growth from 0.1% to 0.5%. Meanwhile, new claims for US unemployment insurance benefits edged up last week, by 4,000 to 317,000. And although the four-week average of new claims rose by 4,750 to 315,250, the broad trend has been for a decline in claims. A year ago the average stood at 344,500 claims.
Wall Street stocks also traded lower on the data. The Dow Jones Industrial Average fell 0.28% to 16,796.68 points in midday trading. The broad-based S&P 500 lost 0.33% at 1,937.40, while the tech-rich Nasdaq Composite Index shed 0.24% to 4,321.68. Investors stepped back after global markets enjoyed a rally at the start of the week in response to upbeat data from the US, China and Japan. While there was a certain amount of profit-taking, analysts suggested some of the losses could be attributed to the World Bank’s decision to trim its 2014 global growth forecast to 2.8% from a January estimate of 3.2%.
In foreign exchange deals, the European single currency edged up to $1.3554 from $1.3532 late in New York on Wednesday. The euro slid to 80.43 British pence from 80.60 pence. The British pound dipped to $1.6851 from $1.6788 on Wednesday. On the London Bullion Market, the price of gold rose to $1,265.75 an ounce from $1,262 late on Wednesday. In European stock action, the mining sector was downbeat as metals prices declined on commodity markets. Anglo American shed 3.2% to 1,465 pence and Rio Tinto lost 3.1% to 3,058 pence.
Concerns that turmoil in Iraq will disrupt Middle East supplies led to a jump in oil prices, with the US benchmark West Texas Intermediate for delivery in July jumping $1.53 compared with Wednesday’s close to $105.93 a barrel. Brent crude for July rallied $2.16 to stand at $112.11 a barrel in late London deals.