LONDON — European markets experienced a downturn on Friday as investors evaluated a series of central bank rate decisions from the week and their implications for the global economy.
The pan-European Stoxx 600 index fell by 0.47% in early trading, with most sectors and major exchanges in negative territory. The household goods sector dropped by 1.34%, while technology stocks decreased by 1.08%.
Automobile stocks were hit particularly hard, declining by 3.59%. Mercedes-Benz led the sector’s slump, with its shares plummeting 8.3% after the company revised its 2024 guidance downward due to weaker demand from China. Other car manufacturers, including Volvo and Stellantis, also saw significant losses, dropping 4.38% and 2.97%, respectively.
Shares of Burberry, the British luxury fashion brand, fell 3.6% following a downgrade by Jefferies, which lowered its rating from “hold” to “underperform” and adjusted its price target. This comes as Burberry was officially removed from the FTSE 100 index, reflecting its recent struggles in the market.
The regional benchmark had closed higher on Thursday, buoyed by the Bank of England and Norway’s Norges Bank holding interest rates steady, contrasting with the substantial rate cut implemented by the U.S. Federal Reserve the day before.
In Asia-Pacific markets, gains from Wall Street carried into Friday, supported by the Bank of Japan and the People’s Bank of China maintaining their current rates.
U.S. futures remained relatively stable after Thursday’s rally, which saw the Dow Jones Industrial Average close at a new record high.
In other economic news, U.K. retail sales rose by a better-than-expected 1% in August, according to the Office for National Statistics. European consumer confidence data is expected later in the session, with no corporate earnings reports scheduled.
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