FRANKFURT: European stocks finished lower Friday, dragged down by a disappointing round of inflation data as well as concerns that a car emission-test scandal could spread.
The Stoxx Europe 600 SXXP, -0.32% lost 0.3% to close at 348.46, with the auto maker sub index down SXAP, -2.15% 2.2%.
For the week, however, the pan-European benchmark gained 1.7%, helped by a rally in oil prices earlier in the week.
Auto maker blues: Shares in Daimler AG DAI, -4.68% fell 5.1% on Friday after the German company said it is reviewing its U.S. emissions certification process on a request from the U.S. Justice Department.
That sparked a selloff in the wider European auto sector, with shares of BMW AG BMW, -1.27% off 1.6%, Peugeot SA UG, -1.74% 1.7% lower and Fiat Chrysler Automobiles NV FCA, -2.38% down 2.4%.
“Car makers have no place to hide as it seems the emissions scandal is set to claim more scalps. As anticipated, the wrongdoing looks like it goes well beyond VW,” said Joe Rundle, head of trading at ETX Capital, in a note.
“Daimler is the next in the firing line as it opens an investigation at the request of the DoJ – the fall in its share price today reflects investors’ nervousness about a problem that could easily escalate, even if the company says the class actions against it are ‘baseless,’” he added.
Volkswagen AG VOW3, -0.96% VLKAY, -1.35% lost 1.3% after the embattled car maker almost tripled its provisions for the diesel emissions scandal to 16.2 billion euro ($18.3 billion).
Volvo AB VOLVB, +4.92% provided a rare bright spot in auto industry. Shares of the Swedish truck maker jumped 4.9% after the company reported a smaller-than-expected slide in core earnings and struck an upbeat tone on the European market.
Data: Surveys of purchasing managers across the eurozone showed the region’s economic activity slowed slightly in April with few signs inflation is returning to the European Central Bank’s target of just below 2%.
The composite, services and manufacturing PMIs for the currency bloc all came in lower than expected.
“A pretty disappointing set of purchasing managers surveys which indicate that the eurozone continues to find economic improvement elusive,” said Howard Archer, chief U.K. and European economist at IHS Global Insight.
“There is little for the ECB to cheer in these surveys with services and manufacturing activity still lackluster and overall output prices charged still falling, albeit at a slightly reduced rate,” he added.
Indexes: France’s CAC 40 index PX1, -0.29% dropped 0.3% to 4,569.66, while Germany’s DAX 30 index DAX, -0.60% gave up 0.6% to 10,373.49.
The U.K.’s FTSE 100 index UKX, -1.11% lost 1.1% to 6,310.44.
Stocks in Asia were mixed. Japan’s Nikkei Stock Average NIK, +1.20% ended 1.2% higher, with exporters boosted by a 1% drop in the yen USDJPY, +2.12% against the U.S. dollar, following hopes of fresh stimulus from the Bank of Japan.
U.S. markets dropped, driven lower by a round of disappointing earnings reports, including from Microsoft Corp. MSFT, -7.17% and Google parent Alphabet Inc. GOOG, -5.32% GOOGL, -5.41%
