European stocks struggle on gloomy German data

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By MG News | February 07, 2019 at 01:00 AM GMT+05:00

0:00

London, Feb 6: Europe's stock markets struggled Wednesday, as investors digested downbeat German economic data and shrugged off gains in Asia and the US.

Frankfurt dropped 0.6 percent as official figures showed that industrial orders in Germany fell back in December, the latest sign of a slowdown in Europe's largest economy.

The news also sent the European single currency diving to $1.1380 -- the lowest level since January 25.

Paris equities meanwhile slid 0.3 percent. Outside of the eurozone, London stocks shed 0.1 percent, with online supermarket Ocado tumbling after a warehouse fire.

"European equities are on the back foot after a surprise drop in German factory orders this morning added to signs that the region's strongest economy is struggling," said Oanda analyst Dean Popplewell.

"The euro has fallen to its lowest level outright in a fortnight on the news."

German factory orders were down 1.6 percent month-on-month, federal statistics authority Destatis said.

However, there was some brighter news in the data as well. Excluding volatile large orders for items like aircraft there was a 3.5 percent increase in new business.

But it was not sufficient to drive Frankfurt stocks into positive territory.

"December saw German factory orders decline at the fastest rate in six months, helping pile further misery on a eurozone which is clearly struggling amid global trade woes," added IG analyst Joshua Mahony.

"This recent phenomenon of a stuttering Germany is certainly more of a worry for eurozone growth.

"With Brexit uncertainty and US-led trade friction, this decrease in factory orders highlights the weaker demand" often associated with significant upheaval and uncertainty, Mahony said.

- Holiday-thinned trade -

In Asia, Tokyo and Sydney shares rose in another holiday-thinned trading day as investors tracked a positive lead from Wall Street.

With most of Asia off for the Lunar New Year break there were few catalysts to drive business.

There was little movement after US President Donald Trump's annual State of the Union address.

Trump touched upon a number of issues including the China trade war, North Korea, the Russia investigation and healthcare.

But while he called for bipartisanship, observers said there was little to suggest his standoff with the Democrats over his Mexican border wall can be resolved anytime soon.

Their battle brought the US government to a standstill for more than a month before it was reopened for three weeks, with the two sides unable to reach an agreement.

 - Key figures around 1150 GMT -

  • London - FTSE 100: DOWN 0.1 percent at 7,170.57 points
  • Frankfurt - DAX 30: DOWN 0.6 percent at 11,305.37
  • Paris - CAC 40: DOWN 0.3 percent at 5,070.60
  • EURO STOXX 50: DOWN 0.3 percent at 3,205.62
  • Tokyo - Nikkei 225: UP 0.1 percent at 20,874.06 (close)
  • Sydney - S&P/ASX 200: UP 0.3 percent at 6,026.10 (close)
  • Hong Kong - Hang Seng: Closed for a public holiday
  • New York - Dow: UP 0.7 percent at 25,411.52 (close)
  • Shanghai - Composite: Closed for a public holiday
  • Euro/dollar: DOWN at $1.1385 from $1.1406
  • Dollar/yen: DOWN at 109.73 yen from 109.96
  • Pound/dollar: UP at $1.2950 from $1.2945 at 2200 GMT Tuesday
  • Euro/pound: DOWN at 87.91 pence from 88.09 pence
  • Oil - Brent Crude: DOWN 44 cents at $61.54 per barrel
  • Oil - West Texas Intermediate: DOWN 39 cents at $53.27

 

(AFP/APP)

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