Europe close: Markets finish lower amid deluge of data
European stocks finished well into the red on Thursday, giving up earlier gains earned after broadly positive manufacturing data[
The pan-European Stoxx 600 was down 0.5% at 393.49, while Germany’s DAX fell 1.41% to 13,003.90 and the CAC 40 in Paris fell 0.5% to 5,454.55.
In Spain, the IBEX 35 was also off 0.5% at 10,399.00, while in London the FTSE 100 fell 0.57% to 7,490.39 and the domestically-focussed FTSE 250 finished 0.29% lower at 20,185.54.
Mike van Dulken, head of research at Accendo Markets, said European equities were starting the month on a mixed note with investors digesting a deluge of mixed corporate results from both sides of the Atlantic, a new chapter in the Federal Reserve, mixed global manufacturing survey results, a weak US dollar keeping the euro and pound strong and another uptick in bond yields.
The eurozone’s booming manufacturing sector made a good start to 2018, as it maintained the record performance seen through 2017.
IHS’ Markit Final Eurozone Manufacturing PMI came in at 59.6 for January, in line with the earlier ‘flash’ figure.
That represented a three-month low and was marginally below December’s high of 60.6, although the figures still remained among the best seen since the survey began in 1997.
“The eurozone’s manufacturing boom continued in full swing in January,” said Chris Williamson, chief business economist at IHS Markit.
“Output grew at one of the fastest rates recorded over the survey’s near 20-year history, matched by a further near-record surge in new orders.”
Germany's manufacturing sector remained firmly in growth mode, though it slipped slightly to 61.1 from 61.2 the month before, while France's PMI also fell slightly to 58.4. But with a PMI above 50 indicating growth, both continue to signal robust expansion in industrial production at the start of 2018.
Elsewhere, the key upside surprise came from Italy where the headline PMI jumped to 59.0, from 57.4 in December.
New orders rose at its strongest pace since 2001, while output growth rose to a six-year high.
In Spain the PMI edged lower to 55.2, from 55.8 in December - not necessarily a bad headline, although manufacturing in Spain was now clearly an underperformer compared to in the rest of the zone.
“It’s been a positive start to trading on the first day of the month, with markets in Europe trading well in the green and US futures ticking a little higher as well,” said analyst Craig Erlam at Oanda.
"The region carried some strong momentum into the new year and the latest manufacturing PMIs suggest confidence in the recovery is showing no signs of faltering.”
In key German political news, the SPD leader Martin Schulz said negotiations with Angela Merkel’s bloc to form the next coalition government were “very encouraging” in terms of discussions on European policy, with negotiators discussing the role of the ESM bailout fund in more detail.
In corporate news, Anglo-Dutch giant Unilever reversed earlier losses to finish up 0.8% in London, following good fourth quarter sales growth.
Underlying sales growth of 4.3% in the quarter, beating the 3.7% expected by the market, helped the consumer goods giant grow underlying sales 3.5% for the full year.
BBVA shares fell 1.44% even though the Spanish bank's fourth-quarter results fell less than expected.
Quarterly net profits slumped to €70m from €678m a year earlier as impairments and higher taxes weighed heavily on solid operating results.
Analysts had forecast a loss of around €160.5 million, according to FactSet.
French software producer Dassault Systemes reported 11% full year growth in new licence revenue, above its 8-10% guidance, with operating margins up 32%.
Its stock fell 0.52% by end-of-play.