European Stocks Close Lower After Cautious Session

(RTTNews) - European stocks closed lower on Monday with investors largely making cautious moves, reacting to data showing a contraction in Germany's economy, and evaluating the likely monetary policy outlook of the central banks.

The volumes were somewhat thin amid a lack of news from the U.S., where markets remained closed today for Martin Luther King Jr. Day.

The pan European Stoxx 600 ended down 0.54%. The U.K.'s FTSE 100 ended lower by 0.39%, Germany's DAX drifted down 0.49% and France's CAC 40 lost 0.72%, while Switzerland's SMI declined 0.17%.

Among other markets in Europe, Belgium, Denmark, Finland, Iceland, Netherlands, Norway, Poland, Portugal, Spain and Sweden ended weak.

Austria and Turkiye closed higher, while Czech Republic, Greece and Russia ended flat.

In the UK market, Burberry Group ended nearly 5% down, and Ocado Group lost about 4.6%. B&M European Value Retail, Lloyds Banking Group and HSBC Holdings declined 2.3 to 2.6%.

Experian, Frasers Group, Rolls-Royce Holdings, Halma, St. James's Place, Kingfisher and Standard Chartered also declined sharply.

Flutter Entertainment climbed 2.75%. Admiral Group, Beazley, Tesco, Aviva and Coca-Cola HBC gained 0.8 to 1.3%.

In Germany, Fresenius ended down 3.4%. Porsche, Zalando, Beiersdorf, Siemens Energy, Sartorius, Bayer, RWE, Daimler Truck Holding, Siemens Healthineers, BMW, Infineon and Deutsche Bank lost 1 to 3%.

Commerzbank moved higher as talks of a merger with Deutsche Bank resurfaced. Munich RE, Continental, Deutsche Telekom and MTU Aero Engines posted moderate gains.

Kontron gained about 2.5%. The IoT technology company said that it sees its net profit grow over 87 million euros in 2024.

In the French market, L'Oreal and Essilor lost about 4.6% and 4.1%, respectively. Teleperformance, WorldLine, Thales, Stellantis, Schneider Electric, Kering and Sanofi ended lower by 1.3 to 2.7%.

Orange climbed nearly 2.5%. Unibail Rodamco, Capgemini, Danone, Credit Agricole, Carrefour, Edenred and BNP Paribas gained 0.7 to 1.4%.

Data from Destatis showed Germany's gross domestic product shrank 0.3% sequentially in 2023, in contrast to the 1.8% expansion seen in 2022. This was the first decline since 2020.

"Overall economic development faltered in Germany in 2023 in an environment that continues to be marked by multiple crises", Destatis President Ruth Brand said at the Berlin press conference. "Despite recent price declines, prices remained high at all stages in the economic process and put a damper on economic growth," he added.

On a calendar adjusted basis, GDP shrank 0.1%, in contrast to the 1.9% expansion in 2022.

Another report from Destatis showed Germany's wholesale prices fell at a slower pace for a second month in a row in December as the steep declines in mineral oil products continued, according to preliminary estimates. The wholesale price index decreased 2.6% year-on-year following a 3.6% slump in November and a 4.2% decline in October.

Data from Eurostat showed Eurozone industrial production declined for the third straight month in November, falling 0.3% in the month. Nonetheless, the pace of decrease softened from 0.7% decrease in October and 0.8% fall in September.

On a yearly basis, the drop in industrial output deepened to 6.8% from 6.6% in October.

Meanwhile, the euro area trade surplus increased to a seasonally adjusted EUR 14.8 billion in November from EUR 11.1 billion in October. Month-on-month, exports registered an increase of 1%, while imports dropped 0.6% in November.