European markets ended near session lows on Thursday after a series of weaker-than-expected PMIs were released for eurozone factory and service activity.
“After yesterday’s falls, European markets already looked vulnerable to growing concerns about a global slowdown,” said Michael Hewson, chief market analyst at CMC Markets United Kingdom.
“These fears were further heightened after the latest flash PMI indices from Germany and France highlighted further economic weakness in June, raising the prospect that both economies could well slide into recession.”
The pan-European Stoxx 600 index fell 0.82% to 402.40, alongside a 1.76% drop on the German Dax to 12,912.59.
The S&P Global Flash Eurozone Purchasing Managers Composite Index – which measures activity in the services and manufacturing sectors – fell to 51.9 from 54.8 in May, below expectations of the consensus for a reading of 54.0.
A reading above 50.0 indicates expansion, while a reading below signals contraction.
A glimmer of hope perhaps, according to the survey compiler: “With business expectations now at their lowest since May 2020, the next few months will be a real test for the sustainability of this capacity building.”
Hence the drop of 16 basis points in the yield of Italian benchmark 10-year gilts, for example.
In stock news, shares of Polymetal bucked the trend and rose sharply, although it said it still struggled to establish new sales channels for silver bullion, leading to lower cash flow generation. However, sales of gold from its Russian mines to Asian markets had returned to a regular schedule after a major coronavirus-related slowdown in April and May.
Shares in a European real estate investor Around the city fell 7% after a downgrade to “sell” from JP Morgan.
Actions in the e-commerce group THG jumped after Town resumption of coverage with a “buy” rating and a price target of 220p.