By Barbara Kollmeyer
European stocks continued to struggle on Wednesday, as extended lockdowns in Germany and the Netherlands have sparked concerns of a slower economic recovery for the region. But fresh data indicated growth could be returning.
Chip makers were standout gainers after upbeat news from U.S. chip making giant Intel.
After losses across Asian markets , the Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +1.19% fell 0.3%, following a 0.2% drop on Tuesday. The German DAX /zigman2/quotes/210597999/delayed DX:DAX +1.43% dropped 0.5%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +1.54% slid 0.3% and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +1.15% fell 0.2%. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.3203% and euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.5463% also eased as the dollar /zigman2/quotes/210598269/delayed DXY -0.49% climbed.
U.S. equity futures /zigman2/quotes/209948968/delayed ES00 +0.10% /zigman2/quotes/210407078/delayed YM00 +1.22% turned higher, led by a 1% gain for Nasdaq-100 /zigman2/quotes/210219788/delayed NQ00 +0.08% futures. The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +2.32% declined 1.1% on Tuesday, with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.06% slumping more than 300 points and the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.49% falling 0.8%.
Losses in Europe were led by banks as yields /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y 0.00% /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y 0.00% also eased in Germany and the U.K. Banks are guided by yields as benchmarks for interest rates charged on loans. Shares of HSBC /zigman2/quotes/208272822/composite HSBC +1.83% /zigman2/quotes/203901799/delayed UK:HSBA +1.14% were down 2%.
With investors rattled by fresh restrictions in major economies such as Germany and the Netherlands, there was some brighter news via a preliminary “flash” reading of the IHS Markit eurozone composite purchasing managers index, which rose to 52.5 in March from 48.8 in February.
“By rising above 50.0, the latest reading indicated the first increase in business activity since last September, with the current expansion the largest recorded since last July and the second-steepest seen over the past 28 months,” said IHS Markit.
Vaccine news will remain in focus, with the European Union on Wednesday expected to announce draft emergency legislation that will allow it to control exports of COVID-19 vaccines, according to a report in the New York Times . That is a day after drug company AstraZeneca /zigman2/quotes/200304487/composite AZN +0.29% /zigman2/quotes/203048482/delayed UK:AZN +0.15% came under scrutiny over data it supplied to the U.S. about a trial there.
Shares of major oil companies such as Total /zigman2/quotes/201824152/composite TOT +3.79% /zigman2/quotes/206172043/delayed FR:FP +2.42% , BP /zigman2/quotes/207305210/composite BP +2.94% /zigman2/quotes/202286639/delayed UK:BP +1.70% and Royal Dutch Shell /zigman2/quotes/205095589/composite RDS.A +3.40% /zigman2/quotes/205095589/composite RDS.A +3.40% remained pressure, a day after oil prices tumbled 6% into correction territory over concerns about COVID-19 lockdowns crimping demand and economic rebounds. Both U.S. /zigman2/quotes/211629951/delayed CL.1 +0.21% and global oil prices clawed back some ground on Wednesday. U.S. crude rose 0.7% and Brent gained 1% after a massive cargo ship got stuck in Egypt’s Suez Canal, a vital waterway for global shipments.
Shares of semiconductor companies ASML Holding /zigman2/quotes/210293876/composite ASML +3.96% /zigman2/quotes/200425945/delayed IT:ASML +2.19% and ASM International /zigman2/quotes/201180544/delayed NL:ASM +1.27% climbed 4% and 6%, respectively, after Intel /zigman2/quotes/203649727/composite INTC +2.48% late on Tuesday announced aggressive plans to expand its manufacturing capacity.
“Intel’s update yesterday pointed to elevated and sustained capex in the near future, a positive for the semiconductor equipment industry,” said Tammy Qiu, analyst at Berenberg, in a note to clients.
Shares of Carrefour /zigman2/quotes/208564127/delayed FR:CA +0.65% rose 0.4%. The French retail chain said its Brazilian unit has entered into an agreement with U.S. retail giant Walmart /zigman2/quotes/207374728/composite WMT +0.93% and private-equity firm Advent International to buy Brazilian food retailer Grupo BIG Brasil in a deal valuing the company at roughly €1.1 billion ($1.30 billion).