Europe Stocks Drop as Autos, Food Firms Slide on Growth ConcernBy
European stocks dropped, led by automobile and food shares amid economic reports that signaled growth eased in June.
The Stoxx Europe 600 Index fell 0.2 percent at the close, widening this week’s decline to 0.3 percent. Price charts show both the 600-member gauge and the Euro Stoxx 50 index rose toward their 50-day moving averages for third day in row, but failed to cross back above them, in a technical signal of weakness. The Stoxx 600 is down 0.6 percent this month.
- A composite Purchasing Managers’ Index for the euro area dropped to a five-month low in June. While manufacturing grew at its steepest pace since 2011, a gauge for services slipped to a five-month low. Carmakers declined 0.7 percent while food stocks lost 0.8 percent, widening their three-day retreat to 2.2 percent.
- Retail shares added 0.5 percent in the first advance in four days.
- On the eve of the one-year anniversary of the U.K.’s Brexit vote, Prime Minister Theresa May told European Union leaders that almost all the 3 million European Union citizens in Britain will be able to continue living there after it leaves the bloc, saying she wanted to offer them as much certainty as possible. EU leaders withheld judgment on the proposal, choosing to wait for the release of the full plan on Monday.
- The more domestic FTSE 250 index of U.K. shares outperformed Europe’s main benchmark, gaining 0.1 percent versus a 0.2 percent loss in the Stoxx 600 Index.
- “The FTSE 250 looks deeply discounted versus the FTSE 100, despite continuing to see EPS upgrades,” Barclays Plc equity strategists wrote in a note. “Sectorally, U.K. retail, banks, homebuilders, travel & leisure and REITs appear cheaply priced.”
- Private-sector activity in France slowed in June even as order growth accelerated and firms added new workers at the fastest pace in almost a decade.
- Oil is heading for a fifth weekly decline after sinking into a bear market, amid concerns rising supply from the U.S. to Libya will offset production cuts from OPEC and its allies.
— With assistance by Elena Popina