After spending much of the day’s session in positive territory despite some weak economic data from the region, European markets closed lower on Friday, paring gains in the final hour.

Uncertainty about the pace of global economic recovery due to the surge in the Delta variant of coronavirus rendered the mood cautious towards the later part of the day’s session.

Investors also weighed the possibility of central banks tapering their easy money policies due to surging inflation.

The markets moved higher on hopes economic recovery is on track after the latest data from the U.S. showed jobless claims in the world’s largest economy saw a bigger than expected drop last week. However, selling pressure in the final hour wiped off gains and pushed most of the markets down to a negative close.

The pan European Stoxx 600 ended 0.26% down. Germany’s DAX and France’s CAC 40 ended lower by 0.09% and 0.31%, respectively, while the U.K.’s FTSE 100 edged up 0.07%. Switzerland’s SMI shed 0.46%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Iceland, Ireland, Portugal, Spain and Turkey ended notably lower.

Czech Republic, Norway and Sweden edged down marginally, while Greece, Netherlands, Poland and Russia closed higher.

In the UK market, IAG shares declined more than 4%. Vodafone Group, Land Securities, Rolls-Royce Holdings, ITV, British Land, Polymetal International, Smith & Nephew, BT Group, Aveva Group, IHG, CRH and Pearson Plc lost 1 to 2%.

Antofagasta, Evraz, Weir Group, Experian and Associated British Foods gained 2 to 3.5%. Rio Tinto ended nearly 2% up. Intertek Group, JD Sports Fashion, Ashtead Group, Smith (DS), Glencore and BHP Group also closed notably higher.

In the French market, Unibail Rodamco declined nearly 4%. Vinci, Air France-KLM, BNP Paribas, Sanofi, Carrefour, Accor, Dassault Systemes, Credity Agricole and Bouygues ended lower by 1 to 2.3.

Shares of petroleum firm Rubis declined sharply as problems in the Caribbean region weighed on the company’s earnings.

Atos moved up nearly 7%. Technip and STMicroElectronics gained 1.85% and 1.65%, respectively. Schneider Electric climbed 1.1%.

In Germany, Fresenius Medical Care ended more than 4% down. Deutsche TeleKom lost 2%, while Vonovia, Volkswagen, Munich RE, RWE and HeidelbergCement ended lower by 1 to 1.3%.

Infineon Technologies gained more than 3%, while Siemens and Puma moved up 1.7% and 1.4%, respectively.

In economic news, French industrial production and manufacturing grew at slower rates in July, preliminary data from the statistical office INSEE showed.

Industrial production grew 0.3% in July, after rising 0.6% in June. Economists had forecast 0.4% gain. Manufacturing output rose 0.6% after a 1% increase in June.

Germany consumer price inflation accelerated to the highest level since late 1993, rising marginally to 3.9% in August, final data from Destatis showed. Inflation rose 3.8% in July.

The UK economy logged weak growth in July as the output remained flat in services, and contracted further in construction on supply shortages, data from the Office for National Statistics showed on Friday.

Gross domestic product expanded 0.1% in July from June, when the economy grew 1%. This was also slower than the 0.6% growth economists had forecast.

Although the economy expanded for the sixth consecutive month, output remained 2.1% below its pre-coronavirus pandemic level.

The European Central Bank (ECB) on Wednesday left its key interest rate, the main refinancing rate, unchanged at zero, the deposit rate at -0.50% and the marginal lending rate at 0.25%, in line with economists’ expectations.

The ECB said it will slow the pace of its emergency asset purchases, which were launched last year to support the economy amid the Covid-19 crisis, as policymakers worry higher inflation may last long.


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