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European Stocks Down For 3rd Straight Day

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EU stocks

European Stocks Down For 3rd Straight Day

July 24 2015, 08.46am GMT


Market sentiment reversed optimism over the Greek parliament’s approval of the second raft of austerity measures as the reality of quarterly corporate earnings and economic data pushed European equities lower for a third straight day.

Stocks on Thursday initially moved up as the news broke that the Greek parliament had approved the raft of austerity measures demanded by its lenders in order to move to the next stage of official negotiations on the bailout program.

Contagion from the weak commodity markets seems to have infected equity markets with the Stoxx Europe 600 (SXXP, +0.20%) closing down 0.5% to 398.10 on Wednesday. The important pan-European index was hurt to a degree by losses in Russian equities that pushed the MICEX (MCX, -1.52%) down 1.2% to 1616.14.

Despite a J.P. Morgan upgrade of Gazprom from overweight to neutral, the oil producer’s stocks fell 1.7% in Moscow. J.P. Morgan had said that Gazprom was an “underdog during high oil prices but may do well in a low price environment.”

Referring to the impact of commodity prices on the equity markets, Richard Perry, market analyst at Hantec Markets said in a note, “Add in the disappointment of earning releases from U.S. corporate giants Apple (AAPL, - 0.05%) and Microsoft (MSFT, +1.25%) and these moves are beginning to become a concern.”

On the individual European indexes, Spain's IBEX 35 (IBEX, -0.28%) reversed earlier gains which had come after the Spanish statistical agency had reported a drop in the unemployment rate in the second quarter.

In Italy the FTSE MIB (FTSEMIB, - 0.16%) fell 0.2% although Fiat Chrysler Automobiles (FCA, - 0.56%) ended higher by 0.4% after an announcement that the firms Ferrari division was planning an initial public offer (IPO).

Also, Germany’s DAX (DAX, - 0.17%) ended 0.1% down at 11,512.11 while the French CAC 40 (PX1, - 0.03%) moved up slightly by 0.1% to 50, 86.74. Completing the list, the U.K.’s FTSE 100 (UKX, - 0.03%) fell 0.2% to 6,655.01.

With gold, silver and oil prices still dropping, the softer sentiment prevalent in commodities can be expected to continue having a depressing effect on equity markets in the short term.

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