LONDON — European stocks closed slightly lower to start the new month as investors digested a fresh round of corporate earnings.
The pan-European Stoxx 600 slipped 0.2% below the fixed line, with oil and gas stocks shedding 1.6% to lead the losses while banks rose 0.9%.
The negative trade in European equities comes after markets in the region ended July higher on Friday and recorded their best month since November 2020.
Investors digested a fresh slice of corporate earnings and key economic data from the euro zone last week, with data released last Friday showing that economic growth in the euro zone accelerated in the second quarter, despite the escalation of the gas crisis and record inflation.
The 19-member bloc posted a 0.7% rise in gross domestic product, beating growth expectations of 0.2% and contrasting sharply with negative annualized readings from the United States in the first and second quarters.
In the United States, U.S. stocks rose after Wall Street’s best month since 2020, as investors anticipated another week of earnings reports and key economic data, particularly the nonfarm payrolls report from Friday from the Bureau of Labor Statistics, which will give more information on the strength of the labor market.
So far this year, solid job growth has prompted economists to say that the United States is currently not in a recession, even with two consecutive quarters of negative GDP.
In Asia-Pacific markets, mainland Chinese stocks rose along with most other regional indices on Monday, as a private survey of Chinese factory activity showed slight growth.
Monday’s earnings came from HSBC, Pearson, Heineken and Erste Group.
Pearson shares jumped 13% to top the Stoxx 600 after the UK education and publishing company posted strong quarterly results, while HSBC soared 6% after raising its key target of profitability.
At the bottom of Europe’s blue chip index, British instrumentation firm Spectris fell nearly 6% after posting lower first-half profits.
On the data front, eurozone manufacturing activity contracted in July, S&P Global’s final manufacturing PMI (Purchasing Managers Index) showed on Monday, adding to fears that the bloc could slide lower. recession.
– CNBC’s Carmen Reinicke and Abigail Ng contributed to this market report.
