European shares ended lower on Thursday after data showed faltering German consumer morale amid rising Covid-19 cases, while investors fretted over US monetary policy ahead of the Jackson Hole symposium.
The pan- European Stoxx 600 index fell 0.3 per cent, with mining and travel & leisure stocks leading losses. The Stoxx 600 had briefly deepened its losses towards the close, tracking a fall in US stocks after sentiment was rattled by a blast in Kabul.
Anticipation of the US Federal Reserve's annual Jackson Hole summit on Friday kept investors on their toes, with chairman Jerome Powell's speech likely to offer hints on the central bank's plans to taper its massive stimulus programme. "We think that those expecting clear communication about the shape and timing of the tapering of asset purchases may be disappointed," said Paolo Zanghieri, senior economist at Generali Investments. "The recent data remain strong, but momentum is receding and inflation fears have not surged."
A survey showed the mood among German consumers darkened heading into September as accelerating inflation and rising Covid-19 cases made them more hesitant to buy.
Homebuilder Glenveagh rose nearly 4 per cent to €1.06 after reporting it has sold, signed, or reserved all the 1,150 homes that it expects to deliver in 2021. And that it has already seen buyers reserve 300 homes that will not come on stream until next year. Glenveagh chief executive Stephen Garvey said the company was focused on "ramping up to 3,000 units" a year by 2024 . Ryanair fell 1 per cent to €16.30 after chief executive Michael O'Leary warned the Irish aviation and tourism industries were facing "four to five years" of difficulties.
He also said Ryanair is moving "10-20 per cent" of its Irish capacity to other European countries where aviation is recovering faster. Building materials giant CRH rose nearly 4 per cent to €45.66 as the US, where CRH has several big operations, upgraded its growth numbers for the second quarter. AIB was up 1 per cent at €2.58.
London’s FTSE 100 fell on Thursday, dragged down by heavyweight mining and financial stocks, as investors weighed risks from rising global Covid-19 infections and supply chain disruptions.
The blue-chip FTSE 100 index ended 0.4 per cent lower, snapping a four-day winning streak, with Rio Tinto, BHP Group, Anglo American and Polymetal International being among the top drags. The domestically focussed mid-cap index eased 0.1 per cent after scaling record highs in the previous session, with travel-related stocks leading the declines.
"Broadly speaking we're seeing a lot more caution in the market today ahead of tomorrow's event . . . and some profit taking may be kicking in some of these commodity markets alongside a little bit of risk aversion," said Craig Erlam, senior market analyst at Oanda.
The FTSE 100 has recovered 10.2 per cent so far this year, supported by easing Covid-related restrictions and dovish central bank policies. The index had slumped 14 per cent last year amid the pandemic. Among stocks, recruitment agency Hays added 4.1 per cent after it forecast a “dramatic” recovery in the jobs market and said it would resume dividends.
European travel company Tui, airlines Wizz Air, Lufthansa and Aer Lingus-owner IAG fell by between 0.9 per cent and 3.8 per cent. Wizz Air was the worst performer on the Stoxx 600, dropping 3.8 per cent. Germany's blue-chip Dax dropped 0.4 per cent, marking its lowest closing level in a week, while the UK's FTSE 100 and France's CAC 40 declined by 0.4 per cent and 0.2 per cent, respectively.
Deutsche Bank's asset management arm DWS Group fell 13.7 per cent on a report US authorities were investigating DWS over sustainability claims. Deutsche Bank's shares dropped 1.5 per cent. France's Vivendi rose 2.6 per cent after its unit Universal Music Group said it expects further revenue growth this year and it aims to pay out dividends once it lists in Amsterdam.
French conglomerate Bouygues gained 1.1 per cent as it raised its full-year earnings outlook. Swedish Orphan Biovitrum was the best performer on the Stoxx 600, rising 8.8 per cent after Bloomberg reported that private equity firm Advent International is considering a bid for the pharmaceutical maker.
US stocks were set to slip from their record perch on Thursday as mixed earnings reports and economic data kept investors on edge ahead of the Federal Reserve’s policy summit.
Data showed the US economy grew a bit faster than initially thought in the second quarter, in a second estimate of GDP growth, while weekly jobless claims increased 4,000 to a seasonally adjusted 353,000 for the week ended August 21st.
Among earnings-driven moves, cosmetics maker Coty gained 6.6 per cent in pre-market trading, while beauty chain Ulta Beauty climbed 6 per cent following upbeat earnings updates. Discount retailers Dollar General and Dollar Tree, however, slipped 4.9 per cent and 6.1 per cent after they warned of profit hit from higher transportation costs. Rate-sensitive banks including Goldman Sachs and JPMorgan Chase gained more than 0.5 per cent . Mega-cap technology stocks Microsoft, Facebook, Apple , Amazon, and Tesla slipped between 0.3 per cent and 0.4 per cent . – Additional reporting by Reuters