On Friday, a basket of European bourses had reported their biggest intra-session plunge in more than one month as investors’ mood soured dramatically after Beijing had ordered to shut down the US consulate in the western Chinese city of Chengdu as part of its retaliation to an identical move by the Trump Administration earlier this week.
In point of fact, despite a raft of upbeat economic data including the eurozone IHS Markit composite PMI (Purchasing Managers’ Index) revealing that the bloc’s business activities had picked up for the first time since early-January, all sectors of regional pan-European STOXX 600 had winded down the day deeper into the reds, as a pandemic resurgence in the United States alongside an abrupt escalation in the latest round of Sino-US spat had overshadowed investors’ optimism, while a profit-taking weekend sell-off wave had also played an active role in Friday’s foundering of a majority of European bourses.
Pandemic worries, Sino-US tension offset encouraging recovery signs
Meanwhile, although Friday’s PMI data in tandem had revealed that the bloc’s largest economy Germany’s manufacturing sector had averted a shrinkage for the first time in 19 months in July, while the eurozone business activity had turned into growth from what could be called as the shortest recession in EU history, the pan-European STOXX 600 faltered 1.7 per cent after Trump Administration had accused the Chinese consulate in Houston of over 2,000 charges of alleged espionage on behalf on Beijing.
Quoting statistics, on Friday’s European market closure, all major stock indices had rounded off the day sharply lower with Frankfurt leading the losses, as London’s FTSE 100 faltered 1.41 per cent to 6,123.82, French CAC 40 had curbed out 1.54 per cent to 4,956.43, while Frankfurt’s DAX was hit with a whiplash of 2.02 per cent to settle down the day at 12,838.06.
Elsewhere in the Europe, Madrid’s benchmark IBEX 35 muzzled 1.22 per cent to 7,294.70, while Italy’s FTSE MIB took a cumbersome header of 1.85 per cent to curtain off the day at 20,075.27.
Nonetheless, flash-lighting the flipside of the coin, a senior Europe economist at Capital Economist, Jack Allen-Reynolds said on Friday’s European market closure, “The sharp rise in the euro-zone Composite PMI is an encouraging sign that economic recovery continued at a decent pace at the start of the third quarter. ”