Home Europe European Equity Benchmarks Close Lower; Financial, Telecommunications Stocks Burden Markets

European Equity Benchmarks Close Lower; Financial, Telecommunications Stocks Burden Markets

The broad-based European equity benchmarks closed lower in Monday trading as telecommunications and financial stocks weighed down the markets.

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The broad-based European equity benchmarks closed lower in Monday trading as telecommunications and financial stocks weighed down the markets.

In economic news, total investment from both the public and the private sectors by European Union (EU) Member States totaled nearly EUR3.1 trillion ($3.72 trillion) in 2017, according to Eurostat, the statistical office of the European Union. Overall, total investment was equivalent to 20.1% of GDP in 2017, compared with 22.4% 10 years ago, just before the economic and financial crisis.

The ratio of investment to GDP was the highest in Czech Republic with 25.2%, followed by Sweden (24.9%), Estonia (23.7%), Austria (23.5%), Ireland (23.4%), Belgium (23.3%), Romania and Finland (both 22.6%) and France (22.4%). The lowest ratio of investment to GDP was recorded by Greece (12.6%), followed by Portugal (16.2%), the UK (16.9%), Luxembourg (17.0%), Italy (17.5%) and Poland (17.7%).

Meanwhile, private sector business activity increased across England and Wales at the start of Q2, led by strong growth in Yorkshire & Humber, according to the most recent regional PMI data from IHS Markit. The increase in private sector output in England was broad-based by region, with the overall pace of expansion picking back up from a 20-month low in March, although at the second-slowest since August 2016. The England Business Activity Index climbed to 53.8 in April from 53.0 the previous month.

In Germany, the number of persons in employment was 44.3 million in Q1, according to the Federal Statistical Office (Destatis). Compared with the same quarter a year earlier, the number of employed increased 609,000, or 1.4%. Compared with the previous quarter, the number of persons in employment in Q1 declined by 316,000, or 0.7%.

Destatis said that a decrease in employment in Q1 of a year is a usual seasonal phenomenon, however, in 2018 the decrease was lower than the average of the past five years (–422,000 people). After seasonal adjustment, the relevant number increased by 196,000 (+0.4%) compared with the previous quarter.

In equities, security company G4S led the FTSE lower in London, falling 2.8%, followed by postal services provider Royal Mail, and telecommunication company BT, which lost 2.7% and 2.4% respectively. Media company ITV, was down 2.3%, while insurance company Direct Line Insurance Group, mining company Evraz, and home improvement retailer Kingfisher each closed 2% lower.

In Frankfurt, financial stocks helped the DAX close in negative territory as banks Commerzbank and Deutsche Bank fell 1.8% and 1.5% respectively, while stock market operator Deutsche Boerse lost 1.1%. Construction materials supplier HeidelbergCement was down 0.8%, while software firm SAP and insurance company Allianz were down 0.6% each. Automakers Daimler, BMW, and Volkswagen also edge lower.

In Paris, airplane manufacturer Airbus helped nudge the CAC into negative territory, falling 2.4%, followed by telecommunications company Orange, and public relations firm Publicis Groupe, which were down 1.2% each. Media, telecommunications, and construction conglomerate Bouygues was down 1.1%, while construction materials supplier Saint Gobain, and chemcials company Solvay shed 1% and 0.9% respectively.

The FTSE lost 0.18%, the DAX fell 0.18%, and the CAC-40 declined 0.02%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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