Euro stocks close lower on mixed data, growth fears; DAX down 0.40%

Investing.com - European stocks closed lower in light trade Wednesday, as concerns over global economic growth continued to weigh on equity sentiment, and mixed U.S. data provided no direction.

At the close of  European  trade, the EURO STOXX 50 dropped 0.08%, France’s CAC 40 declined 0.54%, while Germany’s DAX 30 retreated 0.40%.

Investor confidence weakened after data on Tuesday showed that the euro zone’s gross domestic product contracted by 0.2% in the three months to June, bringing the annualized rate of contraction to 0.4%.

Markets were also jittery after European Economic and Monetary Affairs Commissioner Olli Rehn signaled earlier that Spain’s government is considering a request for a sovereign bailout. 

Sentiment remained mildly supported however by expectations that recent evidence of a slowdown in economic growth would prompt world central banks to implement more easing measures to spur the economic recovery.

Financial stocks were mixed, as shares in German lender Deutsche Bank remained lower, easing 0.04%, and France’s BNP Paribas lost 0.19%, while Societe Generale added 0.25%. Banks in Italy remained closed due to a national holiday.

On the upside, phone company Nokia rallied 5.94% after Reuters reported the company will keep Windows as its smartphone platform, citing Chief Executive Officer Stephen Elop.

Carlsberg jumped 2.65%, erasing earlier losses posted after the world’s fourth-largest brewer said earnings before interest, tax and some one-time items fell 6.1% in the second quarter.

In London, FTSE 100 slid 0.54%, weighed by sharp losses in mining stocks, while data showed that the number of people claiming unemployment benefits in the U.K. fell unexpectedly in July.

Mining giants Rio Tinto and BHP Billiton remained sharply lower, with shares plunging 4.37% and 1.70%, while rival company Vedanta Resources plummeted 2.92%.

Meanwhile, Kazakh metals producer Eurasian Natural Resources dove 7.09%, as first-half sales of USD3.25 billion missed estimates and after the company said the market is going to remain volatile with uncertain pricing. 

Imperial Tobacco Group was also on the downside, with shares retreating 1.70%, after Australia’s High Court rejected a challenge from a number of world tobacco companies, setting a precedent for other nations to follow.

In the financial sector, Standard Chartered surged 4.80% following reports it settled a New York money-laundering probe for USD340 million, a day before the bank was to appear at a hearing to defend its right to continue operating in the state. 

The U.K. lender still faces federal probes over allegations it helped Iran funnel money through the U.S.

Other U.K. banks were mixed. Shares in Lloyds Banking rose 0.31% and the Royal Bank of Scotland dropped 0.78%, while Barclays and HSBC Holdings tumbled 1.01% and 1.20%.

Depressing U.S equities, U.S. Treasury International Capital declined significantly in June, as foreign demand for U.S. assets softened, official data showed on Wednesday.

In a report, the U.S. Department of the Treasury said that net foreign purchases of long-term securities totaled USD9.3 billion in June, compared to purchases of USD55.9 billion in May.

Analysts had expected Treasury International Capital purchases to total USD63.0 billion in June.

In offsetting bullish news,  industrial production in the U.S. rose more-than-expected in July, while the previous month’s gain was revised lower, official data showed on Wednesday.

In a report, the U.S. Federal Reserve said that industrial production rose 0.6% in July, just above expectations for a 0.5% increase.

Industrial production for June was revised down to a 0.1% increase from a previously reported gain of 0.4%.

The report showed that the capacity utilization rate, a measure of how fully firms are using their resources, rose to 79.3% in July from 78.9% in June, beating expectations for 79.2%.

In the U.S., equity markets traded mixed midsession with the Dow down 0.03%, the S&P 500 up 0.13% and the tech heavy Nasdaq ahead by 0.43.

Traders are awaiting the U.S. initial jobless claims and Great Britain’s retail sales numbers on Thursday.