European stocks suffer monthly decline

European stocks posted their first monthly decline since a market selloff in March on Friday as growing doubts over a global recovery from the coronavirus crisis overshadowed a batch of strong earnings from technology firms.

An early reading of the euro zone’s economy showed the bloc shrank by a bigger-thanexpected 12.1% in the second quarter, its deepest contraction on record as lockdowns ravaged business activity. Spain's benchmark index dropped 1.7% as the country posted the worst output slump, while GDP in Italy and France also fell sharply but less than forecast.

The STOXX 600 was down about 1% in July, with fears of a resurgence in COVID-19 cases also weighing on the mood as Britain imposed a tougher lockdown in swathes of northern England, while Spain saw a surge in new infections.

Technology stocks were among the few gainers, up 0.7% after forecast-beating results from Wall Street’s tech majors on Thursday. Nearly 50% of the companies listed on the STOXX 600 have reported quarterly earnings so far, and 64% of those have surpassed beaten-down profit expectations, according to Refinitiv data.

The euro reached its highest in more than two years, and posted its best month since September 2010, raising concerns that its relative strength could crimp European exporters.

Oil prices gained, benefiting from news that U.S. output cuts in May were the largest on record, while gold hovered near its alltime peak, helped by dollar weakness and dire economic numbers from far and wide that sparked a rush to safety.

MSCI's broadest index of Asian shares outside Japan fell 0.3%. Japan's Nikkei dropped 2.82% as a stronger yen weighed on exporters.

Gold rose, with prices up 10% for the month. U.S. gold futures gained 1.54% to $1,972.30 an ounce, just short of record highs set earlier in the week as bullion marched toward the $2,000 milestone. Silver climbed 3.2% to $24.3 per ounce, its largest monthly gain on records going back to 1982, supported by investment and industrial demand.

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.