European Equity Benchmarks Close Mixed; Investors Favor Automotive Stocks Over Supermarkets, Banks

European Equity Benchmarks Close Mixed; Investors Favor Automotive Stocks Over Supermarkets, Banks

The broad-based major European indices closed mixed in Wednesday’s trading session, as automakers buoyed the German market, while supermarket operators and banks weighed on the UK and French exchanges.

In economic news, Eurostat, the statistical office of the European Union, reported the seasonally adjusted volume of retail trade fell 0.5% in the euro area (EA19) in August, compared with July, while it remained stable in the EU28. Compared with August 2016, the calendar adjusted retail sales index increased 1.2% in the euro area, and 2.0% in the EU28.

The 0.5% month-on-month decrease in retail trade volume was due to a drop of 0.9% for automotive fuel, of 0.4% for non-food products and of 0.3% for “food, drinks and tobacco.” In the EU28, the stable volume of retail trade was due to decreases of 0.5% for automotive fuel, and of 0.1% for food, drinks and tobacco,” while non-food products rose 0.2%.

The largest decreases in the total retail trade volume were registered in Portugal (-1.3%), Austria (-1.0%) and Belgium (-0.9%), while the highest increases were seen in Romania (+2.3%), the U.K. (+1.9%) and Malta (+1.5%).

The 1.2% year-on-year increase is due to an increase of 2.3% for non-food products, and a 1.1% rise in food, drinks and tobacco, while automotive fuel fell 0.2%. In the EU28, the 2.0% increase in retail trade volume is due to rises of 3.3% for non-food products, 1.2% for food, drinks and tobacco, and 0.8% for automotive fuel. The highest increases in the total retail trade volume were registered in Romania (+15.8%), Slovenia (+7.5%), Malta (+6.9%), Slovakia (+6.8%) and Poland (+6.7%), while decreases were observed in Luxembourg (-25.6%) and Belgium (-2.4%).

Eurostat also reported the EU28 seasonally adjusted current account of the balance of payments recorded a surplus of EUR41.9 billion ($49.3 billion), or 1.1% of GDP, in the Q2 of 2017, down from a surplus of EUR49.4 billion (1.3% of GDP) in Q1 of 2017, and from a surplus of EUR58.6 billion (1.6% of GDP) in the Q2 of 2016.

In Q2, compared with Q1, the surplus of the goods account fell slightly (EUR34.3 billion compared with EUR34.5 billion) as did the surplus of the services account (EUR39.5 billion compared with EUR40.3 billion). The deficit of the primary income account increased (-EUR7.8 billion compared with -EUR2.2 billion), as did the deficit of the secondary income account (EUR24.1 billion compared with EUR23.2 billion). The deficit of the capital account decreased EUR13.4 billion compared with EUR13.9 billion.

In Q2, the EU28 recorded external current account surpluses with the USA (EUR30.2 billion), Switzerland (EUR22.0 billion), Hong Kong (EUR6.9 billion), Brazil (EUR5.9 billion) and Canada (EUR5.3 billion). Deficits were registered with China (EUR22.0 billion), Russia (EUR6.6 billion), Japan (EUR5.9 billion), offshore financial centers (EUR3.0 billion), and India (-EUR0.5 billion).

In equities, supermarket operators weighed down the FTSE in London, as Tesco, J Sainsbury, and WM Morrison Supermarkets lost 3.2%, 2.4%, and 2% respectively. Utilities company Centrica led all decliners, falling 6.1%, while investment management firm Standard Life, and energy company SSE dropped 3.8% and 3.2%.

In Frankfurt, automakers helped boost the DAX, as BMW, Volkswagen, and Daimler rose 2%, 1.8%, and 1.6% respectively. They were followed by health care company Fresenius, and media company Prosiebensat 1 Media, which closed 1.6% and 1.5% higher. kidney dialysis company Fresenius Medical Care AG, and electricity and gas provider RWE were up 1% and 0.9% respectively.

And in Paris, steel and mining company ArcelorMittal ( MT ) led the CAC lower, falling 2.9%, followed by supermarket operator Carrefour, which was down 1.8%. Banks BNP Paribas and Societe Generale lost 1.8% and 1.1% respectively, while media company Vivendi dropped 0.8%.

The FTSE edged 0.01% lower, the DAX gained 0.53%, and the CAC-40 lost 0.08%.

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