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04.07.2016 10:56

European stocks down after a four-day rally

European stocks down after a four-day rally, as the decline in shares of Italian banks eliminates the rise in price of securities of mining companies. However, because of the celebration of Independence Day, trading volume today will be lower than usual.

Statistics for the euro area and Britain put pressure on the indices The survey results, published by research group Sentix, revealed that the mood among investors deteriorated significantly in July, reaching a 18-month low, which was associated with increased concerns about the economic impact of Brexit. According to the data, investors confidence indicator fell in June to 1.7 points versus 9.9 points in June. Analysts had expected the index to decline to 5.0 points. The last reading was the lowest since January 2015. Sub-index measuring expectations dropped to -2.0 points from 10 points in June, reaching its lowest level since November 2014. Meanwhile, the index measuring the current state of the euro zone fell to 5.5 from 9.8 in June. The data also showed that the sentiment index in Germany fell to 18.4 from 20.7. Investors are also skeptical about the prospects for the German economy - the index measuring expectations fell to 2.7 from 7.9 in June.

With regard to data on the UK, Markit Economics said that business activity in the construction sector deteriorated significantly by the end of June, exceeding the forecasts of experts, and dropping to its lowest level in seven years. The index of business activity in the construction sector fell in June to 46.0 points compared to 51.2 points in May. The last reading was the lowest since June 2009. Economists had expected the index to decline to 50.5 points. The Markit Economics said that almost all respondents have linked the decline in business activity with the uncertainty in the run-up to the referendum on EU membership. "The latest data raise the possibility that the Bank of England will apply additional measures this summer in an attempt to ease the short-term impact of uncertainty on the real economy", - said Tim Moore, senior economist at Markit.

Chancellor George Osborne's plans to cut corporate tax to less than 15 percent in an attempt to offset the shock of investors on the decision to leave the European Union. In addition, the Financial Times said that Osborne will make more efforts in establishing the UK's relations with China. He told the newspaper that wants to build a "super competitive economy" with low taxes for business. However, Osborne did not specify the date of tax reduction.

Experts warn that a further reduction of the tax can enhance the discontent of some EU countries, which have expressed their concern about the competitive tax policies.

The composite index of the largest companies in the region Stoxx Europe 600 fell by 0.2 percent.

"European stocks took a breather after last week's rally and due to the holiday in the US - said Guillermo Samper, director of trading at MPPM EK -We continue to see a shift from the financial and peripheral actions in safe assets such as gold paper companies. . Italian banks remain losers, even with the support of the government, as the main opinion is that they will continue to be under-capitalized. "

The capitalization of the Italian bank Banca Monte dei Paschi di Siena SpA fell by 8 percent, while the value of mining companies Fresnillo Plc and Randgold Resources Ltd. increased by at least 3.5 percent amid gold rise.

Rightmove Plc Shares fell 4.5 percent after the experts have lowered the company's stock rating to "sell".

Volkswagen shares fell 2.3 percent after Executive Officer Matthias Mueller rejected the compensation claims of European customers because of the emissions scandal.

Shares of Deutsche Lufthansa rose 0.2 percent, as the German airline announced the appointment of Chief Financial Officer Ulrich Svensson, which will replace the current head Simone Menezes. since August this year.

At the moment:

FTSE 100 -4.73 6,573.1 -0.1%

CAC 40 4,261.49 -12.47 -0.3%

DAX 9,761.15 -14.97 -0.2%

04.07.2016 11:12

WSE: Mid session comment

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