03 Jul 2022

Europe’s markets slide further after weak business survey data

Europe’s markets slide further after weak business survey data

Markets across Europe dropped back again after closely-watched industry surveys for the month underwhelmed traders.

Flash PMI figures for the economies of France and Germany showed a slowdown in growth, while growth figures for the UK flatlined at a 15-month low.

Real estate and commodity stocks were among the losers in London amid concerns over the global economic outlook.

The FTSE 100 finished ended the day down 68.77 points, or 0.97%, at 7,020.45.

The German Dax decreased by 1.76% by the end of the session, while the French Cac fell 0.56%.

“After yesterday’s falls European markets were already looking vulnerable over rising concerns about a global slowdown,” commented Michael Hewson, chief market analyst at CMC Markets UK.

“These fears have been further exacerbated after the latest flash PMIs from Germany and France pointed to further economic weakness in June, raising the prospect that both economies could well be sliding into recession.

“The Dax has been worst affected after the German government triggered the second phase of its emergency gas plan, over concerns that the economy could well see an energy shortage due concerns that Russia could cut gas supplies heading into the winter months.”

In the US, the main markets started the day in positive territory despite a relatively poor set of manufacturing and services PMI numbers for June.

Meanwhile, sterling edged slightly lower as decreasing business optimism in the latest PMI report impacted sentiment.

The pound was down 0.1% against the dollar at 1.226 and was flat against the euro at 1.166.

In company news, gambling giant 888 slipped in value after it warned that half-year revenues are set to drop due to the UK’s crackdown on online gambling and its temporary exit from the Netherlands.

The group – which is soon to complete its £2.1 billion takeover of William Hill’s UK and European businesses – said turnover for the first half of the year is set to fall to between £330 million and £335 million.

Shares in the firm declined by 14.6p to 160.7p as a result.

Naked Wines shed more than two-fifths of its value on Thursday after the online wine retailer cautioned over sales and earnings for the year ahead.

The group warned that sales could fall by up to 4% in the year to the end of next March, while it expects to only break even on an underlying earnings basis.

Shares finished the session 125.3p lower at 162.1p.

Shares in Trainline were derailed as UK rail strikes continued for a second day with little sign of a resolution and concerns grow that strike actions could continue beyond this week.

The firm dropped by 32.1p to 284.6p as its finance boss also departed for online retailer Boohoo.

The price of oil struggled as the weak PMI figures kept up concerns that demand from industry could waiver due to an economic slowdown.

Brent crude decreased by 0.51% to 111.17 US dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were Ocado, up 35.6p at 855.4p, Hikma, up 44p at 1,546.5p, BT Group, up 3.6p at 185.15p, London Stock Exchange Group, up 126p at 7,464p, and Burberry, up 27.5p at 1,633p.

The biggest fallers on the index were Antofagasta, down 72.5p at 1,171.5p, British Land, down 27.9p at 477.5p, Rolls-Royce, down 4.26p at 81.85p, WPP, down 38.2p at 783.2p, and Pershing Square, down 115p at 2,360p.

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