European shares end lower on dismal data, but shelve third straight monthly gains

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European shares end lower on dismal data, but shelve third straight monthly gains

On Friday, a basket of European bourses edged lower following release of a depressing eurozone GDP (Gross Domestic Product) data, though a majority of European stock indices had marked up their third straight monthly gains on growing hopes of an earlier-than-anticipated recoup from the pandemic-led fiscal slump alongside a slew of strong corporate earnings.

If factuality, European shares’ quarterly earnings’ reports came in much stronger-than-expected over first quarter of the year with above 71 per cent companies topped analysts’ expectation among a third of STOXX 600-listed firms which had posted quarterly earnings’ report thus far.

Nevertheless, in the day’s broader weakness across Europe was mostly catalysed by a eurozone GDP data which had shown that the 26-member bloc’s economy had slipped into a technical recession on fiscal second quarter following a smaller-than-anticipated dip in the first quarter, pushing forth market participants on their heels despite a barrage of upbeat quarterly earnings’ report.

European stocks end lower, but clock monthly gain

Citing statistics, in the day’s European market round off, the regional pan-European STOXX 600 shed 0.3 per cent, chartering close to its all-time closing high, though had closed out the month 1.8 per cent higher.

Apart from that, London’s blue-chip index FTSE 100 added 0.12 per cent to 6,969,81 and French CAC 40 had curbed out 0.53 per cent to 6,269.48, while Frankfurt’s DAX edged 0.12 per cent lower to 15,135.91. Elsewhere in the Europe, Madrid’s IBEX 35 rounded off the day 0.09 per cent lower to 8,815.00, while Italy’s benchmark FTSE MIB soured 0.56 per cent to 24,141.16.

On the month, FTSE 100 soared 3.45 per cent, CAC 40 added 2.73 per cent and DAX shed 1.06 per cent, while over the week, FTSE 100 added 0.50%, CAC 40 gained 0.24 per cent and DAX added 0.19 per cent. Besides, Madrid’s benchmark IBEX 35 shelved 2.7 per cent in weekly gains and Milan’s FTSE MIB surged 2.30 per cent over the week, while on the month, Madrid rose 2.2 per cent and FTSE MIB gained 0.93 per cent.

Meanwhile, referring to an unjustified overvaluation in a number of European stocks, a portfolio manager at Federated Hermes, Lewis Grant wrote in a client note, “Expectations are high, companies are beating even these elevated expectations, and yet the market is responding with caution.

At current valuations, and with much pandemic related uncertainty remaining, many investors are more concerned about downside than upside.