Business Watch

European Equity Benchmarks Close Higher

The broad-based major European indices closed higher in Monday trading, led by mining and automotive stocks.

In economic news, worldwide optimism for business activity and corporate profits in the year ahead has fallen to its lowest since 2009, according to IHS Markit. The lower optimism is accompanied by reduced expectations for employment and investment spending, and inflation expectations have also weakened

“Although confidence about output growth in the year ahead ticks higher in both the Eurozone and UK, the degree of optimism remains the joint second-weakest since 2009 in the UK and close to six-year lows in the euro area,” said IHS Markit. “France bucks the trend in the latter, being the only one of the four-largest euro member states to see optimism deteriorate compared to earlier in the year. However, in all cases, eurozone confidence remains substantially weaker than the peaks seen at the start of last year.”

IHS said Germany had “the gloomiest outlook,” while profits expectations in the UK remain close to February’s post-recession low, and slip to a six-year low in the eurozone. Hiring expectations in Europe also remain subdued.

“Of particular note,” said IHS, “planned investment spending in the UK has fallen to its lowest since late-2011, running below all other countries surveyed globally by a considerable margin, often reflecting heightened political and economic uncertainty due to Brexit. Investment intentions in the eurozone are unchanged, albeit still at the lowest since early-2017.”

The broad-based major European indices closed higher in Monday trading, led by mining and automotive stocks.

In economic news, worldwide optimism for business activity and corporate profits in the year ahead has fallen to its lowest since 2009, according to IHS Markit. The lower optimism is accompanied by reduced expectations for employment and investment spending, and inflation expectations have also weakened

“Although confidence about output growth in the year ahead ticks higher in both the Eurozone and UK, the degree of optimism remains the joint second-weakest since 2009 in the UK and close to six-year lows in the euro area,” said IHS Markit. “France bucks the trend in the latter, being the only one of the four-largest euro member states to see optimism deteriorate compared to earlier in the year. However, in all cases, eurozone confidence remains substantially weaker than the peaks seen at the start of last year.”

IHS said Germany had “the gloomiest outlook,” while profits expectations in the UK remain close to February’s post-recession low, and slip to a six-year low in the eurozone. Hiring expectations in Europe also remain subdued.

“Of particular note,” said IHS, “planned investment spending in the UK has fallen to its lowest since late-2011, running below all other countries surveyed globally by a considerable margin, often reflecting heightened political and economic uncertainty due to Brexit. Investment intentions in the eurozone are unchanged, albeit still at the lowest since early-2017.”

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