Europe open: Stocks off to a weak start in August

by | Aug 1, 2023

(Sharecast News) – The month of August got off to a soft start for European stocks following the release of weaker-than-expected factory survey data out of China.

Against that backdrop, the pan-European Stoxx 600 was edging up by 0.12% to 471.35p, but all the main national indices were lower.

Germany’s Dax was off by 0.6% to 16,347.41 and Spain’s Ibex 35 by 0.62% to 9,581.80.

The euro and Brent crude oil futures were weaker alongside, although 10-year Bund yields were trading up by one basis point to 2.503%.

Overnight, survey compiler Caixin reported that its closely followed manufacturing sector Purchasing Managers’ Index fell from 50.5 points for June to 49.2 in July (consensus: 50.1).

“The Politburo has signalled that China will refrain from major demand stimulus in H2 […] This limited policy support means that China’s recovery probably will continue to be “tortuous”, uneven and drawn out,” said Duncan Wrigley, Chief China+ economist at Pantheon Macroeconomics.

China was a key export market for Europe, especially Germany.

Euro area manufacturing fared even worse in July, S&P Global said, as it confirmed that the HCOB factory PMI declined from 43.4 in June to 42.7.

“It looks like the manufacturing recession is here to stay in the eurozone,” Hamburg Commercial Bank chief economist, Dr.Cyrus de la Rubia, said.

“Stronger declines in output, new orders and purchase volumes at the start of the third quarter back up our view that the economy as a whole is in for a bumpy ride in the second half of the year.”

Related articles

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

(Sharecast News) - European stocks opened in the red on Thursday after hawkish comments from the US Federal Reserve on future rate rises dampened sentiment and investors turned their attention to the Bank of England's own policy meeting. The pan-European Stoxx 600...

Latest Articles

Time for Japan to act (II): State Street Global Markets

Time for Japan to act (II): State Street Global Markets

Written by Michael Metcalfe, Head of Macro Strategy, State Street Global Markets  Writing ahead of the September BoJ gathering in 2022, we argued in Time for Japan to act (first edition!) that the authorities should begin monetary tightening both through moving the...

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

(Sharecast News) - European stocks opened in the red on Thursday after hawkish comments from the US Federal Reserve on future rate rises dampened sentiment and investors turned their attention to the Bank of England's own policy meeting. The pan-European Stoxx 600...

Capita signs two new contracts worth £565m

Capita signs two new contracts worth £565m

(Sharecast News) - Outsourcing group Capita said it has signed two new contracts with the UK and Northern Ireland governments worth a combined £565m. Four months after Capita was selected as the preferred bidder, the group has now confirmed it has sealed the deal to...

Rise in UK borrowing limits Hunt’s scope for tax cuts

Rise in UK borrowing limits Hunt’s scope for tax cuts

(Sharecast News) - Britain's budget deficit in August was slightly higher than expected, according to official data published on Thursday, meaning Finance Minister Jeremy Hunt will have less scope for tax cuts ahead of the General Election. Public sector net borrowing...

Join our mailing list

Subscribe to our mailing list to receive regular updates!

No Fields Found.
x