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Headlines
- Europe's STOXX 600 index declined over 1%, driven by losses in the technology sector and negative sentiment from Asian markets.
- Technology stocks led the decline, influenced by a similar downturn in Asian tech stocks and a slide in the Nasdaq.
- Additional sectors, including basic resources and banks, also experienced significant losses.
Europe's benchmark stock index fell more than 1% on Thursday, primarily due to losses in the technology sector, and was on track to erase gains from the previous session, reflecting the negative sentiment in Asian markets.
The pan-European STOXX 600 was down 1.1% by 0830 GMT, after a 1.5% rise the previous session. Technology stocks heavily impacted the index, falling 1.8% after a decline in Asian tech stocks and an overnight 1.1% drop in the Nasdaq. The basic resources sector decreased by 1.5% due to subdued copper prices caused by higher inventories and a pessimistic global growth outlook.
Banks also suffered, losing 1.3%. Poland's second-largest lender, Pekao, fell 4.4% after a 19% drop in its second-quarter net profit. British banks NatWest Group (NYSE:NWG) and Standard Chartered declined by 3% and 2%, respectively, as they traded without entitlement to their latest dividend payouts.
The STOXX 600 has been volatile this week as market participants weighed fears of a potential U.S. recession amidst lower trading volumes and unclear macroeconomic signals. Upcoming German inflation data, expected on Friday, will provide insight into Europe's largest economy as it faces the possibility of a recession. Additionally, the U.S. initial jobless claims data later in the day will be closely watched.
Paul Donovan, chief economist at UBS Global Wealth Management, noted, The U.S. jobs data may get more attention than normal. Equity markets have been meandering rather than moving with clear direction.
Danni Hewson, head of financial analysis at AJ Bell, added, We're going to see volatility disappear from markets entirely until after we see that first rate cut from the Federal Reserve and see exactly what they are thinking.
Allianz gained 1.8% after the German insurer reported a better-than-expected rise in second-quarter net profit and stated it was on track to meet its full-year target. Conversely, Zurich Insurance lost 2.5% despite exceeding profit forecasts.
Deutsche Telekom increased by 2% after reporting a 7.8% rise in its second-quarter core earnings, in line with analysts' expectations. Beazley soared 13.8% after the British insurer upgraded its combined ratio forecast for 2024 following a near doubling of its first-half pre-tax profit to $728.9 million.
Entain surged 7.9% as the British gambling group raised its annual net gaming revenue and earnings forecast on Thursday, following a better-than-expected second-quarter performance.
