Oil uptick fails to put a smile on European markets; miners take a hit
European stocks closed under slight pressure on Friday as a sharp decline in mining stocks offset optimism surrounding the sharp uptick in oil prices.
The pan-European STOXX 600 ended down 0.1 percent provisionally, with sectors pointing in different directions.
Miners keep a cap on markets
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On the last trading day of the week, a whole host of topics were on the table, from economic data to commodities and earnings reports.
European markets were initially boosted by a strong market performance in Asia where markets finished mostly higher on the back of record finishes in the U.S., while traders shrugged off the torrent of economic data from China that missed expectations.
In China, industrial output for July grew 6 percent on-year, a touch lower than what analysts had expected. Retail sales were up 10.2 percent in July versus a forecast of 10.5 percent, while fixed asset investment growth eased to 8.1 percent on-year in the January-July period, however the market was expecting a number of 8.8 percent, according to Reuters.
Europe was also digesting its own set of data, with Germany's economy expanding 0.4 percent in the second quarter of 2016, which was above expectations, but below the previous quarter's figure of 0.7 percent. In the U.S, markets traded slightly lower following a disappointing set of retail sales data, which came in unchanged, despite economists expecting a 0.4 percent increase
Meanwhile, oil prices continued to have an influence on international trade. Following a strong set of gains on Thursday, crude futures fluctuated on the week's final day of trading, as a supply overhang continued to weigh on investors, yet talk over whether major OPEC producers would discuss ways to prop up the market helped boost sentiment.
Both Brent and U.S. WTI fluctuated between gains and losses during the session, currently higher at $46.40 and $43.95 respectively. Despite the volatility in oil, energy stocks showed a mixed to slightly positive picture with Amec Foster Wheeler shooting up over 3 percent. Tullow Oil led the sector, up around 3.5 percent after Bank of America Merrill Lynch raised its rating from "neutral" to "buy".
Miners however were some of Europe's worst performers on Friday, as metal prices showed signs of weakness. Anglo American, Antofagasta,Rio Tinto and Glencore were all sitting near the bottom of Europe's benchmarks, off around 2 percent or more each. Precious metal minersFresnillo and Randgold Resources were also lower despite the gold price trading sharply higher.
PageGroup, Maersk lead the way
In individual stock news, Moller-Maersk was one of the STOXX 600's best performers, with second-quarter net profits coming in at $101 million, falling short of analyst expectations as it grapples with the slump in oil. The shipping giant also chose to keep its full-year profit outlook unchanged. Shares in the firm pop 5 percent before paring, currently up over 3 percent.
Europe's top performer however was PageGroup, after both Barclays and Numis raised their price target on the stock. This comes after the recruitment firm reported a 12 percent increase in first-half operating profit. Shares jumped over 5 percent.
Drax Group was also sharply higher after HSBC raised its outlook on the stock from "reduce" to "hold". German online retailer Zalando jumped over 2 percent after Exane BNP Paribas and JP Morgan raised their price target for the stock.
Broker ratings also moved other stocks, with potash miner K+S, which reported earnings on Thursday, down over 2 percent after Deutsche Bank and Commerzbank cut their price target for the stock. And British security firm G4S was also in negative territory after Exane BNP Paribas cut its outlook on the stock.
Volkswagen shares were lower, after the embattled automaker revealed that sales in Germany for July were down 8.7 percent, while the U.S. saw sales fall 5.1 percent. China sales however were sharply higher.