European Markets Dropped On Weak Oil Prices & China Concerns

(RTTNews) - The European markets ended Thursday's session solidly in negative territory, extending their recent weakness. Investor sentiment continues to be impacted by concerns over China and weakness in oil prices.

China's Shanghai Composite Index showed a substantial move back to the downside on the day, plummeting by 3.4 percent after jumping 1.2 percent on Wednesday. Meanwhile, crude oil prices have slumped back towards a 6-year low, near just $40 a barrel.

Investors are also concerned that the Federal Reserve is moving closer to raising interest rates, after the release of the minutes from the July meeting late Wednesday.

"Participants viewed the information received over the intermeeting period as suggesting that economic activity had been expanding moderately in recent months," the minutes read.

In a strong sign that the Fed is considering a September rate hike, it said the pace of job gains had been "solid," with a range of labor market indicators suggesting that underutilization of labor resources had continued to diminish.

Most members judged that the conditions for tightening had not yet been achieved, but they noted that conditions were "approaching that point."

The European Stability Mechanism disbursed EUR 13 billion to Greece on Thursday after Eurozone finance ministers approved the third bailout during a conference call.

Athens reportedly honored a EUR 3.2 billion debt repayment to the European Central Bank on Thursday.

The Board of Directors of the ESM approved the first tranche of EUR 26 billion, specifying the terms of the programme, the ESM said in a statement.

Today's EUR 13 billion disbursement is the first part of a sub-tranche of EUR 16 billion, to be used for budget financing and debt servicing needs.

The remaining EUR 3 billion will be provided at the latest by the end of November, when Greece completes additional prior actions.

The second sub-tranche of EUR 10 billion is destined for potential bank recapitalization or resolution.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased by 2.23 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.97 percent.

The DAX of Germany declined by 2.34 percent and the CAC 40 of France fell by 2.06 percent. The FTSE of the U.K. dropped by 0.56 percent and the SMI of Switzerland finished lower by 1.59 percent.

In Frankfurt, Commerzbank decreased by 3.67 percent and Deutsche Bank lost 2.99 percent.

Merck declined by 3.15 percent and Fresenius Medical Care fell by 3.27 percent.

In Paris, Credit Agricole weakened by 4.0 percent and Societe Generale surrendered 2.74 percent. BNP Paribas also finished lower by 1.85 percent.

Renault sank by 4.68 percent and Peugeot lost 1.52 percent.

In London, mining stocks climbed as gold prices continued to rebound. Randgold Resources surged by 5.79 percent and Fresnillo added 5.63 percent. Anglo American climbed by 4.38 percent and Antofagasta gained 3.53 percent. Glencore also rose by 2.45 percent.

Royal Ahold increased by 2.09 percent in Amsterdam, following its second quarter report. Delhaize, which has agreed to merge with the company, also gained 2.71 percent in Brussels.

Gamesa Corporacion Tecnologica sank by 10.17 percent in Madrid and Vestas Wind Systems dropped by 8.05 percent in Copenhagen, following negative broker recommendations.

Telecommunications services provider Sunrise Communications, which cut its full-year revenue forecast, declined by 7.34 percent in Zurich.

Germany's producer prices dropped at a slightly slower pace as expected in July, data from Destatis revealed Thursday. Producer prices decreased 1.3 percent year-on-year in July, following a 1.4 percent drop in June. The annual pace of decline matched expectations. Producer prices have been falling since August 2013.

U.K. retail sales expanded in July, but at a slower than expected pace as auto fuel sales dropped at the fastest pace in four months, data from the Office for National Statistics showed Thursday. Retail sales including auto fuel gained 0.1 percent month-on-month in July, reversing a revised 0.1 percent drop in June. Nonetheless, it was slower than the expected growth of 0.4 percent.

British manufacturers' order books recovered in August, the monthly Industrial Trends Survey from the Confederation of British Industry showed Thursday. The order book balance rose to -1 percent in August from -10 in July. It was better than the expected score of -10 percent.

After reporting modest increases in first-time claims for U.S. unemployment benefits over the past few weeks, the Labor Department released a report on Thursday unexpectedly showing another uptick in initial jobless claims in the week ended August 15th.

The Labor Department said initial jobless claims crept up to 277,000, an increase of 4,000 from the previous week's revised level of 273,000. The continued increase came as a surprise to economists, who had expected jobless claims to edge down to 270,000 from the 274,000 originally reported for the previous week.

Existing home sales in the U.S. unexpectedly saw continued growth in the month of July, the National Association of Realtors revealed in a report on Thursday, with sales climbing to their highest level in well over eight years.

NAR said existing home sales climbed 2.0 percent to an annual rate of 5.59 million in July from a downwardly revised 5.48 million in June. The continued increase came as a surprise to economists, who had expected existing home sales to drop to a rate of 5.40 million from the 5.49 million originally reported for the previous week.

Indicating an acceleration in the pace of growth in regional manufacturing activity, the Federal Reserve Bank of Philadelphia released a report on Thursday showing that its index of activity in the sector rose more than expected in August.

The Philly Fed said its diffusion index of current activity increased to 8.3 in August from 5.7 in July, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to climb to 7.5.

Partly reflecting a sharp drop in housing permits, the Conference Board released a report on Thursday showing an unexpected decrease by its index of leading U.S. economic indicators. The Conference Board said the leading economic index fell by 0.2 percent in July following a 0.6 percent increase in June. Economists had expected the index to rise by 0.2 percent.