European stocks fell on Friday, as investors became cautious heading into the weekend with elections looming in Germany on Sunday, while awaiting news on indebted real estate giant China Evergrande.
The Stoxx Europe 600 SXXP index,
fell almost 1% to 462.91, after three consecutive sessions with gains of around 1% each. For the week, the index is expected to rise 0.5%. The German DAX DAX,
down 0.7%, the French CAC 40 PX1,
fell 1% and the FTSE 100 UKX,
Shares also fell in the United States, as investors soaked up news of several central bank meetings this week, with the Federal Reserve and Bank of England adopting a hawkish tone according to some analysts. The yield on the 10-year US Treasury bond TMUBMUSD10Y,
continued to climb above 1.4% on Friday a day after experiencing the biggest jump in months. German Bund reports TMBMKDE-10Y,
rose 3 basis points to -0.22%.
Investors continued to watch for updates from struggling real estate company China Evergrande 6666,
without any clear news as to whether the company made an $ 83.5 million interest payment on the dollar bonds that were due on Thursday. The bondholders would not have their money yet. The company has 30 days before it can trigger a fault.
Economic data from the German institute IFO revealed a third consecutive monthly decline in the business climate index. “The supply problems of raw materials and intermediate products are slowing down the German economy. Manufacturing is in a bottleneck recession, ”said Clemens Fuest,
president of the ifo institute, in a press release.
It comes as the country faces elections this weekend that will decide who replaces Chancellor Angela Merkel.
“Finance Minister Olaf Scholz (SPD) remains in pole position to succeed Angela Merkel as German Chancellor after Sunday’s elections, although Merkel’s center-right CDU / CSU Armin Laschet has now reduced the This deviation is almost a margin of error. Surprises are possible, “said Holger Schmieding, chief economist at Berenberg, in a note to clients.
The French CAC recorded the biggest losses as a heavily weighted luxury goods group LVMH Moët Hennessy Louis Vuitton LVMH,
fell 2% and German sportswear maker Adidas fell 2.8% on the heels of US rival Nike NKE,
whose shares fell after disappointing results Thursday night.
Mercedes-Benz will become a new partner of a European battery company – Automotive Cells Company – with Stellantis STLA,
and TotalEnergies TTE,
the companies said in a statement. Daimler shares climbed 1.6%. Stellantis shares rose 0.4% and TotalEnergies fell 0.6%.
Rolls-Royce Holding RR,
was one of the main winners, with stocks rising 5%. Berenberg analysts on Thursday posted a positive rating on the company.
“We believe the US decision this week to open its borders to those vaccinated is a positive step towards a more robust recovery in long-haul travel, which has lagged in domestic travel markets. For Rolls-Royce, this will help continue the positive trends in engine flight hours through the first half of 2022 and beyond, in our view, ”said analysts Andrew Gollan and Ross Law.