Europe close: Miners, inflation fears, weak Wall St hit sentiment
European shares finished the week lower as a weak opening on Wall Street, slump in mining stocks and rising euro zone inflation hit sentiment.
The benchmark Stoxx 600 index closed 0.88% lower with most major regional bourses lower. Spain’s Ibex 35 bucked the trend to finish 0.35% higher.
In the US , all Street stocks were trading lower early on Friday with the Dow Jones Industrial Average down 0.30%, the S&P 500 0.52% softer and the Nasdaq Composite 0.57% weaker.
In equity news, miners were on the back foot, led by Anglo American which plunged 8% after Morgan Stanley and UBS downgraded the stock. Rivals Rio Tinto and BHP were also lower on fears of an economic slowdown in China reducing demand for key metals.
"Steel production in China is down as the country looks to cut back on its carbon emissions. Falling demand leads to falling prices, leads to falling profits, its an equation as old as time and one investors have been wrestling with this week," said AJ Bell analyst Danni Hewson.
In economic news, consumer price inflation in the euro area accelerated in August on the back of dearer energy and base effects, potentially piling on the pressure on the European Central Bank.
Eurostat confirmed that the annual rate of increase in the euro area's Consumer Price Index jumped from a 2.2% pace for July to 3.0% in August. While that increase was in line with economists' expectations, many believed that it had further to rise.
In the UK, retail sales volumes fell 0.9% in August from July and unchanged year on year, the Office for National Statistics said on Friday, as grocery sales were hit by more people returning to restaurants and pubs.
Analysts had forecast a 0.5% rise from July and year-on-year growth of 2.7%. Retail sales had risen 2.4% annually in July. However, August retail sales were 4.6% above pre-virus levels.
Elsewhere, UK ministers are looking to scrap a PCR test requirement for returning travellers who have been double-jabbed and scrapping the traffic light system for other countries.
"This would remove a huge blockage for the industry, though what hoops you need to go through once you get to your destination is another matter... ‘your papers please’...’I just wanted a sandwich!’, said Markets.com analyst Neil Wilson.
Shares in Wizz Air, TUI, British-Airways-owner IAG, InterContinental Hotels and airport catering operator SSP were all higher as the UK government considered easing England’s Covid-19 rules for international travel. IHG also got a boost as Berenberg upgraded the stock to 'buy'.
Germany’s Commerzbank climbed after a Handelsblatt report said US investor Cerberus was considering taking a 15.6% state in the bank after the federal election.