European Shares Slide In Cautious Trade
European stocks fell in cautious trade on Tuesday as investors fretted about renewed U.S.-China tensions and a gloomy economic outlook.
The downside, however, was limited after Germany and France joined forces to push for a €500bn EU recovery fund that would offer grants to European Union regions and sectors hit hardest by the pandemic.
The pan European Stoxx 600 dropped 0.9 percent to 338.64 after climbing as much as 4.1 percent in the previous session following encouraging reports on a potential Covid-19 vaccine and on easing of lockdowns across several countries.
The German DAX shed 0.7 percent, France’s CAC 40 index fell about 1 percent and the U.K.’s FTSE 100 was down 0.4 percent.
Shares of Julius Baer Group jumped 4 percent in Switzerland after a spike in trading volumes boosted margins for the wealth manger in the first four months of fiscal 2020.
French spirits company Remy Cointreau plunged 5 percent after Goldman Sachs downgraded its shares to “neutral” from “buy”.
Automakers were declining after industry data showed Europe’s car registrations declined at the strongest pace since records began in April amid Covid-19 pandemic.
Passenger car sales plunged 76.3 percent year-on-year in April, following a 55.1 percent fall in March, the European Automobile Manufacturers Association said. In the first full month of Covid-19 restriction, car demand posted its biggest fall on record.
Renault tumbled 4.7 percent and Peugeot lost 3.7 percent. German automakers BMW, Daimler and Volkswagen were down between 0.6 percent and 1.2 percent.
German industrial company Thyssenkrupp AG added 5 percent after saying it was looking for partners for its steel and warship divisions.
In economic releases, German economic confidence improved notably in May, survey data from the ZEW – Leibniz Centre for European Economic Research showed. The ZEW Indicator of Economic Sentiment rose 22.8 points to 51.0 in May. The expected reading was 32.0.
The U.K. unemployment rate rose only marginally in the first quarter, data from the Office for National Statistics showed. The ILO jobless rate came in at 3.9 percent, well below economists’ forecast of 4.4 percent.
The ONS said the unemployment rate was 0.1 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter.
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