European Markets Finished Mixed Ahead Of BoE Announcement

(RTTNews) - The European markets ended Wednesday's session with mixed results, despite a rebound in bank stocks. Bank stocks were under heavy pressure yesterday following the results of the EU stress tests, but have bounced back strongly today after several of them reported better than expected financial results.

Investors were in a cautious mood ahead of Thursday's announcement from the Bank of England. The central bank is widely expected to cut interest rates to new record lows in response to Brexit-induced economic uncertainty.

The U.K. economy is set to experience a marked slowdown in the second half of this year and throughout 2017, the National Institute of Economic and Social Research said.

Gross domestic product is forecast to grow 1.7 percent this year, slowing to just 1 percent in 2017.

GDP is likely to decline 0.2 percent in the third quarter of this year and there is a risk of a further deterioration.

"There is an evens chance of a 'technical' recession in the next 18 months, while there is an elevated risk of further deterioration in the near term," Simon Kirby, head of macroeconomic modeling and forecasting at NIESR, said.

The pan-European Stoxx Europe 600 index advanced 0.03 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 0.14 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.12 percent.

The DAX of Germany climbed 0.26 percent, but the CAC 40 of France fell 0.16 percent. The FTSE 100 of the U.K. declined 0.17 percent and the SMI of Switzerland finished lower by 0.01 percent.

In Frankfurt, automaker BMW rose 0.45 percent and Volkswagen lost 0.84 percent after unveiling their U.S. sales figures for July.

Publisher Axel Springer dropped 3.43 percent after cutting its 2016 sales guidance.

In Paris, insurer AXA lost 1.98 percent after reporting flat underlying earnings in the first six months of the year.

Societe Generale climbed 3.16 percent as the lender reported an 8 percent rise in second-quarter profit, boosted by lower provisions for bad loans and the sale of its stake in Visa Europe.

Crédit Agricole rose 0.09 percent after reporting a 26 percent rise in second-quarter net profit, boosted by income from a stake sale in Visa Europe.

In London, power solutions specialist Aggreko plunged 13 percent in London on reporting a 40 percent fall in its first-half pretax profit.

HSBC Holdings soared 4.47 percent. The lender announced a $2.5 billion share buyback in the second half of the year despite reporting a 29 percent fall in first-half profit.

Standard Chartered jumped 4.19 percent after returning to profit in the first half.

Retailer Next gained 4.09 percent after reporting a rise in second-quarter sales.

Lender ING Group soared 8.20 percent in Amsterdam after its second-quarter profit more than tripled.

The euro area private sector expanded more than estimated in July, final survey data from Markit showed Wednesday. The final composite output index rose to a 6-month high of 53.2 in July from 53.1 in June. According to flash estimate, the index fell to 52.9.

Eurozone retail sales remained flat as expected in June, data from Eurostat showed Wednesday. Sales remained stable in June from May, when it climbed 0.4 percent. Sales of food, drinks and tobacco edged up 0.1 percent and that of non-food products moved up 0.3 percent.

British service sector shrunk for the first time in over three-and-a-half years and at the fastest pace in more than seven years, amid the uncertainty linked to "Brexit", survey data from Markit Economics and the Chartered Institute of Procurement & Supply showed Wednesday.

The Markit/CIPS business activity index for services declined to 47.4 from 52.3 in June, in line with a flash estimate released on July 22. The monthly drop of 4.9 points was the biggest since the survey began in July 1996, Markit said.

Shop prices in the United Kingdom fell 1.6 percent on year in July, the British Retail Consortium said on Wednesday. That follows the 2.0 percent decline in June.

China's private sector expanded at the fastest pace since September 2014 in July despite moderation in services activity growth. The Caixin composite output index rose to 51.9 in July from 50.3 in June, survey data released by Markit showed Wednesday.

The services sector in China continued to expand in July, albeit at a slower pace, the latest survey from Caixin showed on Wednesday with a services PMI score of 51.7. That's down from 52.7 in June, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Ahead of the release of the Labor Department's more closely watched monthly jobs report on Friday, payroll processor ADP released a report on Wednesday showing that U.S. private sector employment rose by a little more than expected in the month of July.

ADP said private sector employment increased by 179,000 jobs in July after climbing by an upwardly revised 176,000 jobs in June. Economists had expected employment to grow by about 170,000 jobs compared to the addition of 172,000 jobs originally reported for the previous month.

After reporting strong U.S. service sector growth in the previous month, the Institute for Supply Management released a report on Wednesday showing that the pace of growth in the sector slowed by more than expected in the month of July.

The ISM said its non-manufacturing index declined to 55.5 in July after jumping to a seven-month high of 56.5 in June. Economists had expected the index to show a more modest drop to 56.0.