Investing.com - European stocks extended losses on Thursday, as fresh concerns over the outlook for economic growth in the euro zone and dampened expectations for further easing measures by the Federal Reserve weighed on investor confidence.
During European afternoon trade, the EURO STOXX 50 dropped 0.65%, France’s CAC 40 declined 0.49%, while Germany’s DAX 30 retreated 0.73%.
European stocks were hit after European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.
Meanwhile, investors remained cautious after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
Sentiment had weakened earlier, after the Fed said in the minutes of its June policy meeting that the U.S. economy would have to worsen further before the central bank implements additional easing measures.
Financial stocks turned broadly lower, as shares in Germany’s Deutsche Bank and Commerzbank plummeted 2.85% and 2.22%, while French lenders BNP Paribas and Societe Generale retreated 0.60% and 1.71% respectively.
Meanwhile, software company Temenos saw shares dive 23.13% after reducing its forecast for 2012 revenue growth. The company also said CEO Guy Dubois will step down for personal reasons and be replaced by David Arnott, who’s currently the chief financial officer.
On the upside, Peugeot climbed 1.29% after Europe’s second-biggest carmaker said it will close the first auto factory in France in 30 years and eliminate 14,000 jobs in an effort to stem widening operating losses.
French retailer Carrefour also rallied 7.73%, after saying earlier that second-quarter revenue fell 0.3% to 21.7 billion euros, slightly less than analysts’ estimates.
In London, commodity-heavy FTSE 100 tumbled 1.11%, weighed by sharp losses in mining stocks.
Rio Tinto saw shares plummet 3.87% and BHP Billiton tumbled 2.62%, while copper producers Xstrata and Kazakhmys retreated 2.08% and 2.17%.
Energy stocks also contributed to losses as oil and gas major Anglo American plunged 1.90%, while BP saw shares fell 0.31%. Premier Oil jumped 3.12% on the other hand, after it agreed to buy a 60% stake in Rockhopper Exploration’s assets in the Falkland Islands.
In the financial sector, stocks remained broadly lower. HSBC Holdings plunged 2.18% and Lloyds Banking tumbled 1.20%, while shares in the Royal Bank of Scotland and Barclays dropped 1.03% and 0.43% respectively.
Elsewhere, Aegis Group skyrocketed 45.31%, after Dentsu Inc., a Japanese advertising company, agreed to buy the U.K. firm in a deal valued at about GBP3.16 billion.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.65% decline, S&P 500 futures signaled a 0.73% drop, while the Nasdaq 100 futures indicated a 0.57% loss.
Also Thursday, official data showed that industrial production in the euro zone rose for the first time in three months in May, increasing by 0.6%. Analysts had expected a modest 0.1% decline.
Later in the day, the U.S. was to release government data on unemployment claims and official data on import prices.
During European afternoon trade, the EURO STOXX 50 dropped 0.65%, France’s CAC 40 declined 0.49%, while Germany’s DAX 30 retreated 0.73%.
European stocks were hit after European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.
Meanwhile, investors remained cautious after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
Sentiment had weakened earlier, after the Fed said in the minutes of its June policy meeting that the U.S. economy would have to worsen further before the central bank implements additional easing measures.
Financial stocks turned broadly lower, as shares in Germany’s Deutsche Bank and Commerzbank plummeted 2.85% and 2.22%, while French lenders BNP Paribas and Societe Generale retreated 0.60% and 1.71% respectively.
Meanwhile, software company Temenos saw shares dive 23.13% after reducing its forecast for 2012 revenue growth. The company also said CEO Guy Dubois will step down for personal reasons and be replaced by David Arnott, who’s currently the chief financial officer.
On the upside, Peugeot climbed 1.29% after Europe’s second-biggest carmaker said it will close the first auto factory in France in 30 years and eliminate 14,000 jobs in an effort to stem widening operating losses.
French retailer Carrefour also rallied 7.73%, after saying earlier that second-quarter revenue fell 0.3% to 21.7 billion euros, slightly less than analysts’ estimates.
In London, commodity-heavy FTSE 100 tumbled 1.11%, weighed by sharp losses in mining stocks.
Rio Tinto saw shares plummet 3.87% and BHP Billiton tumbled 2.62%, while copper producers Xstrata and Kazakhmys retreated 2.08% and 2.17%.
Energy stocks also contributed to losses as oil and gas major Anglo American plunged 1.90%, while BP saw shares fell 0.31%. Premier Oil jumped 3.12% on the other hand, after it agreed to buy a 60% stake in Rockhopper Exploration’s assets in the Falkland Islands.
In the financial sector, stocks remained broadly lower. HSBC Holdings plunged 2.18% and Lloyds Banking tumbled 1.20%, while shares in the Royal Bank of Scotland and Barclays dropped 1.03% and 0.43% respectively.
Elsewhere, Aegis Group skyrocketed 45.31%, after Dentsu Inc., a Japanese advertising company, agreed to buy the U.K. firm in a deal valued at about GBP3.16 billion.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.65% decline, S&P 500 futures signaled a 0.73% drop, while the Nasdaq 100 futures indicated a 0.57% loss.
Also Thursday, official data showed that industrial production in the euro zone rose for the first time in three months in May, increasing by 0.6%. Analysts had expected a modest 0.1% decline.
Later in the day, the U.S. was to release government data on unemployment claims and official data on import prices.