The broad-based major European indices closed sharply lower in Wednesday trading as falling technology and financial services stocks helped push the markets into negative territory.
In economic news, the IHS Markit Eurozone PMI Composite Output Index fell in November to its lowest level since September 2016. The index dropped to 52.7 from 53.1 in October, thanks in large part to Germany, which registered its weakest expansion in nearly four years. Italy remained the weakest-performing country, with activity down slightly for a second straight month.
Firmer growth was seen in Ireland, France and Spain, although expansion remained down compared with earlier in the year.
Despite the latest slowdown, growth has occurred throughout the past five-and-a-half years with the manufacturing and service sectors continuing to expand in November, according to IHS Markit. Service sector growth remained solid, despite being the weakest reported in more than two years. The firm said the downturn in overall activity growth was closely correlated with a similar fall in the rate of new business expansion to a 27-month low.
"The final eurozone PMI for November came in higher than the flash reading but still only points to modest GDP growth of approximately 0.3% in the fourth quarter, suggesting the region remains stuck in a soft-patch," Chris Williamson, chief business economist at IHS Markit. said in a statement. "Output and order books are growing at the slowest rates for over two years as a manufacturing-led slowdown showed further signs of spreading to the service sector."
Meanwhile Eurostat, the statistical office of the European Union, reported that the seasonally adjusted volume of retail trade increased 0.3% in the euro area (EA19) and 0.1% in the EU28 in October compared with September. In September, the retail trade volume decreased 0.5% in the euro area, and 0.3% in the EU28. Compared with October 2017, the calendar adjusted retail sales index increased 1.7% in the euro area, and 2.1% in the EU28, according to Eurostat.
The largest monthly increases in total retail trade volume were registered in Slovenia (+7.9%), Portugal (+2.3%) and Austria (+1.6%), while the highest monthly decreases were seen in Finland (-2%), Denmark and Sweden (both -1.2%). The highest yearly increases were in Slovenia (+13.3%), Ireland (+8.4%) and Lithuania (+7.3%), while decreases were reported in Malta (-2.3%), Finland (-1%) and Luxembourg (-0.3%).
The Austrian presidency and the European Parliament reached a provisional agreement on the EU budget for 2019, clearing the way for the adoption of the budget before the end of the year, if the deal is backed by member states in the Council and the European Parliament plenary next week.
Under the agreement, the total commitments in the 2019 EU budget are set at EUR165.8 billion ($188.2 billion) and payments at EUR148.2 billion, which is an increase of 3.17% in commitments and 2.37% in payments compared with 2018. To formally adopt the EU budget, the European Council needs to adopt its position on the European Commission's new draft budget, taking into account the agreement reached with the Parliament. That is scheduled to take place at a meeting of the General Affairs Council on Dec. 11.
In equities, industrial equipment rental company Ashtead Group led the FTSE lower, falling 5.8%, followed by turnaround firm Melrose Industries and health care company NMC Health, which lost 5.1% each. Financial services firm Hargreaves Lansdown and electric services company John Wood Group lost 4.5% and 4.1% respectively, while mining company Glencore closed 3.9% lower.
In Frankfurt, internet company Wirecard and semiconductor company Infineon helped weigh down the DAX, falling 2.7% and 2.4% respectively, followed by kidney dialysis company Fresenius Medical Care and financial services company Allianz, which dropped 2.2% each. Postal services provider Deustche Post lost 2.1%, while industrial manufacturing company Siemens and reinsurance firm Munich Re each closed 1.9% lower.
In Paris, oilfield services company TechnipFMC and automaker Peugeot led the CAC lower, losing 3.5% and 3.4% respectively, followed by semiconductor company STMicroelectronics, which dropped 3.3%. Public relations firm Publicis Group and construction materials supplier Saint Gobain each closed 3% lower, while financial protection firm AXA and construction company Vinci were off 2.8% and 2.6%.
The FTSE fell 1.44%, the DAX dropped 1.19%, and the CAC-40 lost 1.36%.
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