Europe close: Regions mixed, but Stoxx 600 ends firmly lower

(Sharecast News) - Poor economic data and uncertainty ahead of next week's French elections weighed heavily on European markets on Thursday, with the Stoxx 600 index falling 0.4% by the close to its lowest level in eight sessions.

However, the decline in the benchmark index masked a mixed performance across the continent, with indices in Paris and Milan dropped more than 1%, falling 0.5% in London but rising 0.3% in Frankfurt - with the latter helped by gains from some heavyweight blue chips.

The Stoxx 600 finished at 512.72 - its lowest closing level since 17 June.

In economic data, the eurozone June Economic Sentiment Indicator (ESI) declined slightly in June to 95.9 from 96.1 in May, missing expectations of a small rise, while employment expectations fell below their long-term average to 99.7.

Rory Fennessy, senior economist at Oxford Economics, said: "The June ESI corroborates the other high-frequency survey data in suggesting that the eurozone's economic recovery will be bumpy.

"We think GDP will rise in every quarter of 2024, but there are downside risks to growth if leading indicators fail to post a sustained recovery over the coming months."

Market risk appetite was also limited ahead of a key inflation report from the US, with the personal consumption expenditures index for May due out on Friday afternoon.

"Should this point towards a further slowdown in price growth then the final day of June trading might go the same way as May's, which saw a strong rally. A softer PCE reading could renew hopes of a September rate cut, which have taken a knock of late," said Chris Beauchamp, chief market analyst at IG.

Market movers

Germany's Dax benchmark index outperformed the rest of the region, with strong gains from the likes of Siemens, Deutsche Bank, SAP and Siemens Energy.

In Sweden, H&M plunged 13% after unstable weather in large markets at start of June had a negative impact on sales. The world's second-largest fashion retailer said net sales increased 3% in the three months to 31 May, but were set to fall by 6% in June.

The new fared badly for other European retail peers, such as Zalando and Inditex, which were also out of favour.

Watches of Switzerland surged 8% after holding annual guidance despite weaker profits driven by lower UK sales of luxury timepieces.

Shares in biopharma giant GSK tumbled 5% after a ruling by a US health agency narrowed usage recommendations for all respiratory syncytial virus (RSV) vaccines, restricting the addressable market for the company's Arexvy product.

Meanwhile, BP finished higher after saying it had implemented a hiring freeze and halted new offshore wind projects, as part of a strategic shift under new chief executive officer Murray Auchincloss.