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European stocks down after German GDP data; DAX drops 0.45%

Published 11/15/2012, 04:22 AM
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Investing.com - European stocks were lower after the open on Thursday, as a combination of concerns over the looming fiscal crisis in the U.S. and worries over the euro zone’s economic outlook weighed on investor confidence.

Market players also kept an eye on developments regarding geopolitical tensions in the Middle East after Israel assassinated a senior Hamas commander on Wednesday.

During European morning trade, the EURO STOXX 50 fell 0.3%, France’s CAC 40 dipped 0.2%, while Germany’s DAX 30 shed 0.5%.

Investors remained concerned over the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise before then.

Meanwhile, official data showed that the pace of Germany's economic growth slowed to 0.2% in the third quarter, following a 0.3% increase in the previous quarter.

A separate report showed that France's economy’s expanded 0.2% in the third quarter, beating the expected flat reading, following a contraction of 0.1% in the previous quarter.

Data also showed Spain's economy contracted 0.3%, while Italy’s economy shrank 0.2% in the third quarter.

In earnings news, shares of Zurich Insurance tumbled 3.6% after the company's earnings missed third quarter estimates.

Swedish clothing retailer H&M dropped 2.4% after reporting a sharp sales fall in October.

On the upside, Germany’s Merck climbed 1.6% after reporting third-quarter earnings that exceeded expectations and raising its sales forecast for 2012.

Elsewhere, in London, commodity-heavy FTSE 100 slid 0.45%, weighed by losses in oil and mining stocks.

Oil giant British Petroleum shed 0.8% after company said it was in talks with the U.S. Department of Justice and the Securities and Exchange Commission about resolving criminal charges stemming from the explosion of the Macondo well in the Gulf of Mexico in 2010.

Mining giants BHP Billiton and Rio Tinto declined 0.9% and 1% respectively.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.15% rise, S&P 500 futures signaled a 0.3% increase, while the Nasdaq 100 futures indicated a 0.15% gain.

Later in the day, the U.S. was to release reports on initial jobless claims, consumer price inflation, crude oil stockpiles, in addition to data on manufacturing activity in New York and Philadelphia.

Meanwhile, a speech by Federal Reserve Chairman Ben Bernanke was to be closely watched for any indications on the future possible direction of monetary policy.

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