European Markets Mixed as German, U.K. Confidence Data Diverge
European markets ended the day mixed after business confidence data in the U.K. and Germany showed a post-Brexit divergence.
Data from Germany's Ifo showed the country's business climate index deteriorated only slightly in July to 108.3 from 108.7, ahead of the 107.5 reading that Ifo's survey of about 7,000 companies was expected to generate. Companies' expectations also held up better than expected, while their assessment of the current situation unexpectedly rose.
The Munich research group pointed to declining confidence among manufacturers and wholesalers, but strength in the construction sector as the business climate indicator for that industry climbed to a record high.
The CBI Industrial Trends Survey showed business confidence had fallen in the U.K. The respondents gave a grim view of the upcoming quarter, which will be the first full quarter since the U.K. voted to leave the European Union.
Of the 506 manufacturers polled, only 5% of firms said they were more optimistic about the general business situation than three months earlier, 52% said they were less optimistic, giving a balance of -47%. This is the lowest reading since January 2009.
In London, the FTSE 100 ended the day 0.47% down at 6,698.79.
In Frankfurt, the Dax had a volatile day as three fatal attacks over past two days sparked terrorist worries. The benchmark index ended the day 0.33% up at 10,180.54
Rangold Resources (GOLD) - Get Report was the biggest loser on the FTSE 100 today, losing 3.39%, as the price of gold fell.
Miners Fresnillo and Rio Tinto (RIO) - Get Report were also down, 1.6% and 0.5% respectively. BP BP fell 2.6% and Royal Dutch Shell RDS.A was down 2.6% as oil prices fell.
Brent crude was recently down 1.82% to $44.86 a barrel.
The Cac 40 in Paris ended the day up 0.15% at 4,374.36.
Bookmaker William Hill (WIMHY) gained 8.8% today after it was confirmed that 888 Holdings and Rank were considering a takeover bid for the bookmaker. Rank and 888 said this morning that no formal approach had been made but that they see "significant industrial logic in the combination."
Shares in Italian bank Monte dei Paschi (BMDPY) dropped 8% in Milan, prompting a temporary halt to trading. The shares fell on concerns it may need additional capital. Talks between Italy and the European Commission about a possible bail-out have not yet been fruitful.
Monte dei Paschi is under pressure to sort out more than €10 billion ($10.98 billion) of non-performing loans. The bank is expected to fare badly in the European Banking Authority's stress tests, which will be released on Friday at 10 p.m. European time.
UniCredit shares in contrast were recently up 0.4%.
However, a note released by Goldman Sachs today suggested the non-performing loan situation at Italy's banks was not as bad as previously suggested. Analysts calculated that the NPLs could be wiped off balance sheets with the equivalent of nine months of bond purchases by the European Central Bank.
Ericsson (ERIC) - Get Report was up 1.5% after it was announced CEO Hand Vestberg would step down immediately. There has been growing shareholder discontent after disappointing earnings from the Swedish telecom equipment maker.