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European shares showed mixed performance on Thursday as investors analyzed weak eurozone construction data and awaited upcoming US non-farm payroll figures.
The Stoxx 600 index, which tracks a broad range of European stocks, rose marginally by 0.05% to 515 in early trading. Markets in the UK, Spain, and Germany saw gains, while the overall sentiment remained cautious.
The latest US Labor report added to uncertainties about the global economy. Job openings fell to 7.67 million, a steeper decline than anticipated, while hires saw a modest increase of 0.2% month-on-month to 273,000. This report heightened concerns about the trajectory of the world's largest economy. Derren Nathan, head of equity research at Hargreaves Lansdown, noted that attention is now focused on Friday’s critical non-farm payrolls report, which is anticipated to show an increase of 161,000 jobs and a slight drop in the unemployment rate to 4.2%. Despite these figures, markets are still weighing the likelihood of a 0.25% rate cut this month, with the chance of a 0.5% reduction also gaining traction.
Economic data from the eurozone revealed ongoing struggles in the construction sector. The HCOB eurozone Construction purchasing managers' index remained at 41.4, the same as July’s six-month low. This index, below the neutral 50 mark, indicates continued contraction in construction activity, marking a decline for the past 28 months. The survey highlighted a sharp fall in new orders, increased prices, and subsequent reductions in construction activity and employment.
In corporate news, Volvo (LSE:0MHW) saw its shares rise after the company announced it would no longer limit its future lineup to fully electric vehicles by 2030. Instead, Volvo plans to include hybrid vehicles as well. Conversely, shares of SSP (LSE:SSPG), a travel food outlet operator, dropped following a downgrade to ‘equalweight’ by Morgan Stanley.
Associated British Foods (LSE:ABF) experienced a decline in its stock as Primark reported a projected fall in like-for-like sales by around 0.5% for the second half of the financial year, with a more significant decline anticipated in the fourth quarter due to adverse weather impacting UK and Ireland footfall and seasonal sales.
Housebuilder Vistry’s shares increased following the announcement of a £130 million share buyback, coupled with a 7% rise in first-half pre-tax profit.
