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European Equity Benchmarks Close Mixed; Euro Area Unemployment Falls to 9.1%.

on Aug 01, 2017 at 3:27PM in Banks, Economics, Politics, Society, Europe

The broad-based major European indices closed mixed in Monday's trading session, as financial companies and utilities stocks weighed down the markets.

In economic news, Eurostat, the statistical office of the European Union, reported that euro area annual inflation is expected to be 1.3% in July, which is flat from June. Among the main components of euro area inflation, energy is expected to have the highest annual rate in July (2.2%, compared with 1.9% in June), followed by services (1.5%, compared with 1.6% in June), food, alcohol and tobacco (1.4%, stable compared with June) and non-energy industrial goods (0.5%, compared with 0.4% in June).

Eurostat also reported that the euro area (EA19) seasonally-adjusted unemployment rate was 9.1% in June, down from 9.2% in May, and down from 10.1% in June of 2016. It is the lowest rate recorded in the euro area since February 2009.

The EU28 unemployment rate was 7.7% in June, stable compared to May, and down from 8.6% in June of 2016. This remains the lowest rate recorded in the EU28 since December 2008. Eurostat estimates that 18.725 million men and women in the EU28, of whom 14.718 million in the euro area, were unemployed in June 2017. Compared with May, the number of persons unemployed decreased by 183,000 in the EU28 and by 148,000 in the euro area. Compared with June 2016, unemployment fell by 2.4 million in the EU28 and by 1.7 million in the euro area.

The lowest unemployment rates in June were recorded in the Czech Republic (2,9%), Germany (3.8%) and Malta (4.1%). The highest unemployment rates were observed in Greece (21.7% in April 2017) and Spain (17.1%).

In Germany, Federal Statistical Office (Destatis) reported that in June, approximately 44.2 million German residents were employed, which is a record high since German reunification in 1990. Compared with June of 2016, the number of employed increased by 657,000 or 1.5%. In the other months of the first half of 2017, the year-on-year growth rates had been 1.5%, too. Approximately 1.6 million people were unemployed in June, 236,000 fewer than a year earlier.

Destatis also reported that retail trade in June was in real terms 1.5%, and in nominal terms 3.1%, larger than that in June 2016. The number of days open for sale was 25 in June 2017 and 26 in June 2016. Compared with the previous year, turnover in retail trade was in the first six months of 2017 in real terms 1.7% and in nominal terms 3.5% larger than in in the corresponding period of the previous year.

In equities, utilities companies Severn Trent and United Utilities Group helped nudge the FTSE into positive territory, rising 4.1% and 3.1% each. They were followed by financial service company Hargreaves Lansdown, bank Standard Chartered, and insurance company Prudential, which gained 3%, 2.4%, and 2.1% respectively, while HSBC closed 2% higher.

In Frankfurt, Deutsche Bank led the DAX lower, falling 2.1%, followed by industrial group ThyssenKrupp, and automaker Volkswagen, each of which lost 1.3%. Airline operator Deutsche Lufthansa and health care company Fresenius were down 1.2% and 1.1% each, while tire maker Continental, and automobile manufacturer Daimler dropped 1.1% and 0.9% respectively.

And in Paris, industrial group Legrand, and Essilor International, which makes ophthalmic optical equipment, weighed down the CAC, falling 4.5% and 4% respectively, followed by airplane manufacturer Airbus, which was down 2.5%. Oilfield services firm TechnipFMC declined 2.4%, while Carrefour closed 1.8% lower. Auto parts supplier Valeo and media company Vivendi were off 1.5% and 1.3% each.

The FTSE gained 0.05%, the DAX lost 0.37%, and the CAC-40 fell 0.73%.

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