- Fed taper in focus after jobless claims fall, CPI rises
- Oil higher as Egyptian violence escalates
- H&M misses forecasts with July sales
FTSE 100: -1.58%
CAC 40: -0.51%
FTSE MIB: 0.48%
IBEX 35: -0.59%
Stoxx 600: -1.06%
Disappointing results from bellwethers Hennes & Mauritz (H&M) and Zurich Insurance weighed on European markets on Thursday, while concerns about an imminent tapering of stimulus in the States continued to dampen investor sentiment.
The ongoing violence in Egypt also continues to be a worry for markets with oil prices
higher on fears that the unrest could disrupt supplies in the Middle East. Meanwhile, a wave of car-bomb attacks in Baghdad added to the drag on investor sentiment after dozens were left dead across the Iraqi capital.
The Stoxx Europe 600 index finished 1.06% lower today at 305.34, its sharpest daily percentage fall in over a month. The benchmark was pulling back after hitting a three-month high the day before after data showed that the Eurozone exited an 18-month-long recession in the second quarter.
With no major economic figures out across the Europe today - with the exception of UK retail sales - the focus was largely on the US where data continues to be scrutinised for its potential knock-on effect on monetary policy.
Wall Street benchmarks opened on the back foot on Thursday after data from the labour market - a deciding factor in the Federal Reserve's scaling back of stimulus - came in better than anticipated with jobless claims falling to their lowest levels since October 2007. Given the rise in consumer prices also announced today, speculation about an imminent tapering of asset purchases at the central bank's next meeting in September continues to ramp up.
Markets were also focusing on disappointing results from Wal-Mart as the largest retailer in the world scaled back full-year earnings guidance. US network-equipment group Cisco Systems was also making headlines after announcing it would slash its workforce by 5.0%, getting rid of 4,000 jobs.
H&M misses forecasts with July sales
H&M, the world's second largest clothing retailer, finished lower today after missing estimates with a surprise 1.0% drop in like-for-like sales in July, disappointing analysts who had expected a 1.0% rise. Including stores open for less than a year, the Swedish firm reported a 9.0% increase in total currencies.
Zurich Insurance dropped after reporting second-quarter net income of $789m which missed analysts' estimates. "The economic environment remains challenging with continued low interest ratesexerting pressure on our investment income," said Chief Executive Officer Martin Senn.
Swedish cosmetics group Oriflame fell sharply after posting second-quarter earnings and sales that fell short of analysts' predictions.
In London, household, construction and building sectors were under heavy selling pressure today with housebuilder Persimmon continuing to pull back after a strong recent run. Sector peers Travis Perkins, Wolseley, Keller, Barratt Developments, Bovis Homes and Taylor Wimpey also finished with steep losses.
Imperial Tobacco was among the few risers on the FTSE 100 after saying in a third-quarter update that it is sticking to its full-year expectations despite a fall in volumes and sales, owing to difficult market conditions in Europe.