By Barbara Kollmeyer
European stocks fell on the last day of the month, quarter and first half of 2021, with investors looking past encouraging inflation data to focus on worries over a contagious strain of COVID-19.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.46% slipped 0.4% to 454.63 The index has gained around 14% in the first half of the year, 5.8% for the second quarter and 1.8% for the month. The German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.46% and the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.71% lost 0.7% and 0.4% each, while the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.20% fell 0.4%.
Weighing in recent sessions has been growing worries over rising delta variant cases, that are making up the majority of U.K. cases and spreading across several countries. Some are worried the spread could begin to dent the global recovery.
But Euroepan stocks pared losses as U.S. stocks opened mostly steady, after the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.11% and Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.82% finished Tuesday’s session in record territory after upbeat data. Data showed U.S. private-sector employment increased by 692,000 in June, which was well above forecasts from economists.
Data in Europe showed a consumer prices dipped to 1.9% in June from 2% in May, according to a flash estimate from Eurostat. Energy prices drove the annual rise for inflation, a 12.5% gain on the year.
Investors shouldn’t get complacent about inflation in the region, said Willem Sels, chief investment officer, private banking and wealth management at HSBC, in a note to clients. He sees the headline number hitting 2.8% by the end of the year before starting to drift lower.
“While oil and other commodities will become less of a driver for inflation this year, low inventories of industrial goods mean that goods price inflation will remain with us until companies have replenished their stock, which may take several months,” said Sels. “And in services, the current pricing pressure we are all experiencing when trying to book a staycation or visit our favourite restaurants will remain until the supply of labour in these sectors catches up with demand later in the year.”
Banks were among the biggest decliners in Europe, with shares of HSBC /zigman2/quotes/208272822/composite HSBC +0.07% /zigman2/quotes/203901799/delayed UK:HSBA +0.01% , BNP Paribas /zigman2/quotes/206351084/delayed FR:BNP +0.21% and Banco Santander /zigman2/quotes/202859081/composite SAN -0.26% /zigman2/quotes/205677933/delayed ES:SAN -0.95% down around 0.5% each.
Auto makers were also under pressure, with shares of Porsche Automobil Holding /zigman2/quotes/202769371/delayed XE:PAH3 +1.42% down 3.7% and Volkswagen /zigman2/quotes/203434344/delayed XE:VOW3 +2.24% /zigman2/quotes/206919008/delayed XE:VOW +1.31% off 1.6% .
Acciona Energia set its initial public offering at the lower end of an expected range, seeking a market capitalization of around 8.8 billion euros ($10.47 billion). The renewable energy company, which is owned by Spain’s Acciona SA /zigman2/quotes/208100866/delayed ES:ANA +2.09% , said the IPO would be priced at EUR26.73 per ordinary share. Acciona shares fell 0.7%.