European Stocks Slide as Tech and Banks Struggle
European shares fell on Friday, dragged down by technology and bank stocks. The dip was worsened by Carlsberg Group's slump after Britvic rejected its $3.9 billion takeover offer. As of 0814 GMT, the pan-European index was down 0.3%, with the technology sub-index losing around 1% and euro zone banks slipping 1.3%.
Carlsberg and Britvic Saga
Carlsberg Group's shares dropped nearly 8% after Britvic turned down its takeover bid, stating the proposal "significantly undervalued" the company and its prospects. Conversely, Britvic's shares surged by more than 11%.
Market Overview
Despite the day's downturn, the European benchmark was on track for modest weekly gains, recovering from more than a 2% drop last week. This previous drop happened after French President Emmanuel Macron called for a snap parliamentary election.
Analysts' Perspective
"We are gingerly recovering, but the volatility will remain with regards to the French elections going forward until the first date of the election," said Axel Rudolph, senior market analyst at IG Group.
Economic Data
On the data front:
- German business activity slowed in June.
- France's services sector contracted more than expected.
- Euro zone business growth slowed sharply this month, with demand falling for the first time since February.
Following the release of this data, government bond yields across the continent slipped, and the euro was down 0.1% against the dollar.
UK Retail Sales Surge
In the UK, retail sales jumped sharply last month, rebounding from a revised 1.8% decline in April. However, the blue-chip index was down 0.3% at 8251.94 points.
Global Market Influence
Global investors remained cautious after both the S&P 500 and the Nasdaq closed lower overnight, as a rally in Nvidia seemed to lose steam. "If we were to see some profit-taking in the U.S. markets today, that would probably drag down European indexes," IG Group's Rudolph noted.
Stock Movements
- Zealand Pharma of Denmark soared 19.6% after a study showed a high dose of its drug helped reduce weight by an average of 8.6% after 16 weekly doses.
- British discount chain B&M fell 1.6% after Morgan Stanley downgraded its rating to "underweight" from "equal-weight".
- Shares of ABB dropped about 3% following a downgrade to "sell" by Deutsche Bank.
Overall, the European market experienced significant pressure from tech and bank stocks, with external influences and local economic data playing crucial roles.
