European stock markets flat
European stock markets were flat on Wednesday, subdued by dour signals from Deutsche Bank and Aston Martin as well as a slide in commodity-linked stocks, with weak euro zone manufacturing and services surveys adding to worries on the outlook for growth.
The purchasing manager (PMI) surveys showed euro zone business growth was weaker than expected in July, hampered by a deepening contraction in manufacturing, and some indicators suggested conditions will get worse next month.
France's CAC 40 .FCHI erased early gains to fall 0.2% after the data, while Germany's DAX .GDAXI pared gains.
On the earnings front, shares in Germany’s biggest bank (DBKGn.DE), in the midst of sweeping changes to reboot its business, fell 3.7% after it reported a bigger than expected loss, while those in luxury car maker Aston (AML.L) sank 23.2% after it cut its annual forecast for wholesale sales.
Positive signs on U.S.-China trade talks and the prospect of a supportive message from the European Central Bank on Thursday offset those blows, along with some positive earnings from French carmaker Peugeot (PEUP.PA) and German chemicals maker Covestro AG (1COV.DE).
By 0808 GMT, the pan-European stocks benchmark STOXX 600 was trading flat, hovering around two-week highs hit a day earlier.
Stocks have been shakier in the past fortnight after recovering strongly from falls in May that were the worst in more than two years.
While investors have dialed down forecasts for corporate earnings in the near-term, expectations that major central banks will loosen monetary policy continue to prop up sentiment.
Basic materials slid 1.5%, with a fall in iron ore prices and a Credit Suisse downgrade to ‘underperform’ taking shares of Rio Tinto down 4%. That pushed London's commodity-heavy FTSE 100 .FTSE 0.5% lower.
Shares of Infineon, STMicroelectronics, and Siltronic rose between 1.1% and 2.4% after results from Texas Instruments Inc hinted that a global slowdown in microchip demand would not be as long as feared. Chip stocks helped the technology sector rise 0.7%.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.