European Equity Benchmarks Close Lower; European Employment Levels Hit Record Highs

European Equity Benchmarks Close Lower; European Employment Levels Hit Record Highs

The broad-based major European markets closed lower in Wednesday’s trading session, as utilities and energy stocks weighed down the exchanges.

In economic news, employment levels rose 0.4% in the euro area (EA19), and 0.3% in the EU28 in Q3 compared with the previous quarter, according to Eurostat, the statistical office of the European Union. Compared with the same quarter last year, employment increased by 1.7% in the euro area, and by 1.8% in the EU28 in Q3. During the quarter, 236.3 million men and women were employed in the EU28, of which 156.3 million were in the euro area – the highest levels ever recorded in both areas.

Estonia (+1.3%), Croatia and Malta (both +1.1%), and Bulgaria (+1.0%) saw the highest increases compared with the previous quarter, while decreases were reported in Lithuania (-0.5%) and Poland (-0.3%), while employment remained unchanged in Romania and the UK.

Eurostat also reported that industrial production rose by 0.2% in the euro area (EA19) and by 0.3% in the EU28 in October compared with September. Compared with October of 2016, industrial production increased by 3.7% in the euro area, and by 4.2% in the EU28. The highest monthly increases were registered in Ireland (+10.6%), Denmark (+2.8%) and Croatia (+2.7%), and the largest decreases in Malta (-6.1%), Portugal (-2.3%) and the Netherlands (-1.8%). Meanwhile, the highest annual increases in industrial production were seen in Ireland (+13.4%), Slovenia (+10.7%), Poland (+10.0%) and Romania (+9.1%). Decreases were observed in Denmark (-2.3%), Malta (-1.4%) and the Netherlands (-0.4%).

In the UK, the Office for National Statistics ( ONS ) reported that unemployment rate fell marginally (by 0.1 percentage points) to 4.3% in the three months to October, compared with the previous quarter, its lowest level since 1975. The UK employment rate fell by 0.2 percentage points to 75.1% in the three months to October 2017 compared with the previous quarter.

The level of employment fell by 50,000 for men and by 6,000 for women. At the same time, real earnings decreased by 0.2% (including bonuses) and by 0.4% (excluding bonuses) in the three months to October, compared with the same period a year earlier. The net outflow from employment (44,000), during July to September represents the highest net outflow from employment since July to September 2011.

In Germany, the Federal Statistical Office (Destatis) reported that consumer prices rose 1.8% in November compared to the same month last year. Compared with October of 2017, the consumer price index increased by 0.3%.

Energy prices as a whole, which were up 3.7% compared with a year earlier, had an upward effect on the overall inflation rate. Between November 2016 and November 2017, the prices of mineral oil products increased 7.7%, and annual increases were also recorded for electricity (+2.0), charges for central and district heating (+1.0%) and solid fuels (+0.9%). Only gas prices declined from a year earlier (-1.4%). Excluding energy prices, the inflation rate in November 2017 would have been slightly lower (+1.7%). Food prices (total) also increased markedly, rising 3.2% in November compared with a year earlier.

Destatis also reported that the selling prices in wholesale trade increased 3.3% in November, compared with the same month last year.

In equities, industrial equipment rental company Ashtead Group helped nudge the FTSE into negative territory in London, falling 5.4%, followed by energy provider Centrica, which lost 3.7%. Aviva and biotech firm Shire lost 2.0% each, while United Utilities Group and water utility Severn Trent were off 1.6% and 1.4% respectively.

In Frankfurt, electricity and natural gas suppliers RWE and E.ON weighed down the DAX, tumbling 13.1% and 4.9% respectively, followed by footwear and apparel retailer Adidas, which shed 2.9%. Consumer goods company Beiersdorf, and health care company Fresenius SE, each closed 0.8% lower, while technology company Siemens was off 0.7%.

In Paris, oilfield services company TechnipFMC, and electricity provider Schneider Electric, led the CAC lower, falling 1.8% and 1.7% respectively, followed by environmental management services provider Veolia Environnement, and telecommunications operator Orange, which lost 1.2%. Airplane manufacturer Airbus, bank Credit Agricole, and natural gas and electricity supplier Engie each closed 1.1% lower.

The FTSE edged 0.05% lower, the DAX lost 0.44%, and the CAC-40 fell 0.51%.

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