The Malta Independent on Sunday
Economic data points to stalling of euro zone recovery
Downbeat economic data that pointed to a stalling of the euro zone recovery hit regional stock markets on Friday, with the panEuropean STOXX 600 index marking weekly losses as coronavirus cases rose across the continent.
Paris-listed shares fell 0.3% after a worse showing from the French survey, while euro zone blue chips were down 0.4%. The opening gains proved short-lived, with the wider STOXX 600 index falling 0.2%, but firmer trading on Wall Street on the back of better data helped limit losses into the close.
The STOXX 600 recorded a 0.9% loss for the week, with growthlinked cyclical sectors such as banks, oil & gas firms and automakers hit hard as several European countries saw a resurgence in coronavirus cases that raised fears of more restrictions on business activity.
The Nasdaq and S&P 500 hit record highs and the dollar broke an eight-week losing streak, gaining as weaker economic data in Europe weighed on the single currency.
The fresh impetus came from a preliminary purchasing managers’ survey that showed U.S. business activity in August snapped back to the highest level since early 2019, data firm IHS Markit said. Services and manufacturing indices also rose, even though new COVID-19 cases remain high across the United States.
Somber economic numbers earlier in the day in Europe, including euro zone data pointing to a faltering recovery, doused stock market gains in Asia overnight, and also caused the euro to recoil further from recent peaks. The loss of momentum came after fresh numbers painted a muted economic outlook, with purchasing managers’ index releases from France and Germany as well as the wider euro zone falling short of expectations.
Europe’s troubles weighed more heavily on oil, which lost about 1% on Friday on concerns about the global economic recovery, renewed coronavirus lockdowns and rising crude supplies. Brent fell about 1% for the week, while WTI saw a weekly rise of nearly 1%.
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.