by Diana Mandia

(Reuters) – European stock markets ended lower on Friday, weighed down by banks and technology, as investors digested a series of economic indicators that point to a slowdown in economic activity in the euro zone.

In Paris, the CAC 40 ended down 0.56% at 7,628.57 points. In Frankfurt, the Dax fell 0.38% and in London, the FTSE 100 dropped 0.42%.

The EuroStoxx 50 index lost 0.71%, the FTSEurofirst 300 0.76% and the Stoxx 600 0.69%.

Over the week, however, the Stoxx 600 gained 0.84% ​​and the CAC 40 1.67%, offering a little respite after their sharp falls last week, when the markets were shaken by the announcement by the French president Emmanuel Macron of early legislative elections.

Banks and the technology sector were particularly hard hit on Friday during a session rich in macroeconomic indicators and in a context of dollar appreciation which also weighed on stocks.

S&P Global/HCOB surveys showed a slowdown in private sector activity in June in Germany and France, the two largest economies in the euro zone, which should argue in favor of a further cut in the key rates of the European Central Bank (ECB).

This data pushed down government bond yields across the continent, although the movement eased at the end of the session.

Markets are pricing in around 68 basis points of ECB rate cuts by the end of the year, up from 65 basis points before the data was released.

The persistence of high inflation and wage demands, however, raise doubts about the number of cuts to come.


On the STOXX 600, the banking sector, still under pressure due to political uncertainty in France, lost 1.53%. French banks Société Générale, BNP Paribas and Crédit Agricole all ended the week in the red.

After its recent gains, and while Nvidia’s push in New York seems to be running out of steam, the European technology sector ended down 1.2%.

In Frankfurt, the German battery manufacturer Varta dropped 2.1%, after announcing Thursday evening a downward revision of its turnover forecast for 2024.

Elsewhere in Europe, the Danish brewer Carlsberg fell 9.3% after the British group Britvic (+7.7%) rejected its takeover offer.


Wall Street struggles to find direction as investors digest higher-than-expected U.S. economic activity figures and their impact on the central bank’s plans.

At closing time in Europe, the Dow Jones fell 0.06%, the Standard & Poor’s 500 rose 0.04% and the Nasdaq Composite rose 0.26%.

Artificial intelligence semiconductor manufacturer Nvidia dropped 0.7%, extending the losses suffered during the previous session which caused it to lose its newly acquired status as the largest market capitalization.


In addition to the release of Eurozone PMIs, investors also learned on Friday that UK retail sales rebounded more strongly than expected month-on-month in May.

While commercial activity slows in the euro zone, it reached its highest level in 26 months in June in the United States, thanks in particular to the increase in employment, according to the PMI indices published on Friday shortly after the opening of the New York Stock Exchange.

On the other hand, housing resales fell in May for the third month in a row, record prices and the rise in mortgage rates having slowed down potential buyers.


The dollar gained 0.21% against a basket of benchmark currencies, supported by robust data on the American economy and the Fed’s wait-and-see approach to interest rates.

The euro lost 0.08% to 1.0691 dollars.


Eurozone bond yields fell on Friday, as the publication of Eurozone PMI surveys reinforced hopes of a further ECB rate cut given the slowdown in activity.

The yield on the ten-year German Bund ended down 1.4 basis points at 2.4000%, while that on the two-year bond fell 3.1 basis points to 2.7910%.

In France, the yield on the ten-year OAT increased by 1.2 basis points to 3.1653%. The two-year, more sensitive to rates, ended with a decline of 2.4 basis points to 3.0974%.

Highly watched in view of the legislative elections in France, where the campaign for the first round will enter its home stretch on Monday, the yield gap between German and French ten-year bonds widened slightly on Friday to stand at 74, 5 points.

In the United States, yields increased after the publication of the PMI indices: that of ten-year Treasuries increased by 1.5 basis points to 4.2690%.


Oil prices were mostly stable on Friday but on track to record their second straight week of gains thanks to signs of improving demand and falling U.S. oil and fuel inventories;

Brent gained 0.04% to $85.74 per barrel and American light crude (West Texas Intermediate, WTI) fell 0.01% to $81.28.


(Some data may have a slight lag)

(Written by Diana Mandiá)

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