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Europe close: Stocks end lower as investors in technology space

Thu, 3rd Sep 2020 17:34

(Sharecast News) - A slightly worse than expected reading on weekly US jobs filings triggered profit-taking took stocks in Europe down a peg.
Equity strategists meanwhile added a long-list of factors that were nagging at investors.

In the case of Barclays,'s strategists they were telling clients that: "Equities had a strong run in August and could be in for a bumpier ride. Market technicals are stretched (mainly in the US), some 'concept' TMT stocks look bubbly, the bond market is getting more jittery, and US elections, virus resurgence or Brexit negotiations are potential risks.

"A pullback is thus possible, yet we stick to the view that equities will continue to grind higher over the coming months, and climb the wall of worry."

Stocks across the Continent thus reversed earlier sharp gains, although most benchmarks had been trading close to technical levels of resistance.

The benchmark Stoxx 600 fell 1.4% to 366.08, alongside a drop of 1.4% for the German Dax to 13,057.77 while the FTSE Mibtel declined 1.54% to 19,551.48.

At the pan-European level, Technology issues fared worst, giving back 3.76%, while Basic Resources was down 3.26%.

Travel&Leisure did add 0.49%, but that was a far cry from the three percentage point rise it was sporting at midday.

Euro/dollar dipped alongside, by 0.14% to 1.1836, after the Financial Times reported that European Central Bank officials were concerned that euro strength would weigh on Eurozone exports and prices.

Meanwhile, French authorities laid out plans for a €100bn stimulus programme for the euro area's second-largest economy.

And to the East, German finance minister, Olaf Scholz, again made the case for fiscal stimulus in 2021, albeit adding that the country's finances should return to normal in 2022.

In remarks to ARD television, the head of Germany's CDU/CSU, Ralph Brinkhaus, appeared to endorse those plans.

The news on the fiscal front came as Eurostat reported a slowdown in euro area retail sales in July to a year-on-year pace of 0.4%, down from 1.2% in the month before (consensus: 3.7%).

IHS Markit's euro area services sector Purchasing Managers' Index for August was revised up from a preliminary reading of 50.1 to 50.5, although even that remained far beneath July's reading of 54.7.

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