FRANKFURT: European markets finished in the red on Thursday, as a renewed decline in oil prices, a sharp fall in mining stocks and a mixed set of earnings capped gains in the region.
The pan-European STOXX 600 finished down 0.5 percent provisionally. Sectors ended mixed to lower.
Britain’s FTSE 100 slipped 0.95 percent, and Germany’s DAX fell 1.1 percent, while the French CAC 40 was off 0.5 percent.
U.S. stocks struggled to post strong gains on Thursday and were trading in a range at Europe’s close, after oil prices pared and Apple shares declined. This added pressure to European stocks.
Oil prices stumbled during Thursday’s later session. Price were initially higher, following new data from the International Energy Agency (IEA), which suggested oil markets were heading towards a balance. Concerns over a gradual return of Canadian oil sands output and a global supply glut have been causing turbulence in the market lately, according to Reuters.
Brent and WTI crude both fluctuated, hovering at $47.03 and $45.84, respectively at Europe’s close. Despite this fluctuation, some energy stocks managed to post solid gains, with OMV jumping 2.3 percent, after Credit Suisse raised its price target on the stock.
Meanwhile, a sharp fall of 2 to 3 percent in the price of several metals caused basic resources to fall 2.35 percent as a sector, with Anglo American sinking 6.8 percent, and fellow miners BHP Billiton, Glencore and Antofagasta all closing over 3 percent down.
Mark Carney, governor of the Bank of England, at the bank’s quarterly inflation report news conference in London, on Wednesday, Aug. 13, 2014.
In central bank news, the Bank of England’s (BoE) nine-member monetary policy committee voted unanimously to keep its main interest rate on hold at 0.5 percent. The BoE also warned of risks to the U.K. economy if the country chooses to leave the European Union, this June.
Policymakers at the central bank said a so-called Brexit could lead to “materially lower” economic growth and a potentially sharp weakening of the pound. Its governor, Mark Carney added that in a downside a scenario, a “Brexit” could result in a technical recession.
The banking sector was once again in focus for investors. UBS shares tanked almost 6 percent, with Credit Suisse also closing sharply lower. The moves come after the Swiss government agreed on final versions of new banking rules, aimed to protect the country’s economy from a major lender collapsing. Under the rules, UBS and Credit Suisse would be required to have 5 percent leverage ratio of core capital to total assets.
UBS shares were also trading ex-dividend on Thursday. Raiffeisen Bank International fell over 5 percent after HSBC cut its price target for the stock.
A number of insurance players were reporting on Thursday. Zurich Insurance said first-quarter net profit came in at $875 million, beating market expectations and sending shares to close up 6.6 percent. But Italian insurer Generali ended trade 4 percent down, after its operating profit in the first quarter fell 12.3 percent.
Secretary of State John Kerry leaves his hotel on the way to mass at the St. Stephen’s Cathedral in Vienna, Austria July 12, 2015 where the Iran nuclear talks meetings are being held. World powers raced to clinch a landmark deal to prevent Iran acquiring a nuclear bomb, with a source close to the marathon talks saying an agreement was ’98-percent’ completed.
At the bottom of Europe’s benchmarks was Dutch insurer Aegon, which saw shares slump 11.4 percent after its underlying pretax profit came in below expectations.
German utility RWE however was a top performer, jumping 6.8 percent, after it said first-quarter operating profit rose 7 percent to 1.7 billion euros, beating market expectations and sending shares surging.
Meanwhile, Bayer shares fell almost 5 percent by the close, after a Bloomberg report said the German firm was exploring a potential bid for Monsanto Co., citing people familiar with the matter. When contacted by CNBC, Bayer declined to comment. Chemicals was one of the worst performing sectors, off 1.9 percent.
