By Peter Nurse
Investing.com – European stock markets weakened Thursday on the back of dire business activity surveys that vividly illustrated the depth of the region’s economic shutdown, outweighing some better-than-expected quarterly earnings reports.
French business activity plunged even more than expected this month, with the eurozone’s second largest economy reporting its preliminary purchasing managers’ index for April dropping to 11.2 from 28.9 in March, the lowest reading on records going back to 1998.
And the news from Germany, the region’s biggest economy, wasn’t any better. Both services and manufacturing suffered record falls in output due to the coronavirus outbreak and measures to contain it. The composite PMI index plunged to 17.1 from 35.0 the previous month. The eurozone manufacturing index fell to 33.6, well below the 39.2 forecast.
Germany is still at the beginning of the coronavirus pandemic and will have to live with it for a long time, Chancellor Angela Merkel said on Thursday.
“We are not living in the final phase of the pandemic, but still at the beginning,” she told the Bundestag lower house of parliament.
Yet there has been some positive news in the corporate world Thursday.
Shares in Credit Suisse (SIX:CSGN) rose 0.4% after the Swiss banking giant reported a jump in first-quarter net profit of 75% despite setting aside an additional 568 million Swiss francs ($552 million) for credit losses.
Hermes International (PA:HRMS) climbed 1.4% despite reporting a drop of 7.7% in its first-quarter revenue as its business was hit by the coronavirus. Its sales held up better compared with rivals LVMH Moet Hennessy Louis Vuitton (PA:LVMH) and Kering (PA:PRTP), whose first-quarter revenue recorded double-digit declines.
Italian and Spanish banking stocks were broadly higher after the European Central Bank adjusted its lending rules on Wednesday to ensure that it could still lend to them if their sovereign is downgraded to junk status.
Also, Aston Martin (LON:AML) shares climbed over 4% after it said it plans to restart its St Athan factory in south Wales on May 5 and will also resume operations at Gaydon later, after the coronavirus-led shutdowns forced the luxury car maker to suspend production at both sites.
The oil market recovered Thursday, posting healthy gains after recent historic losses, but remains at low levels given the global supply glut.
Stocks – Europe Lower Early After Weak PMIs
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