European shares are trading lower today, with weaker-than-expected German industrial production data, which indicates a slowdown in recovery, especially with the increase in cases of coronavirus globally.
European indices recorded the following movements:
German DAX, trading down 1%
French CAC index trading down 1%
British FTSE, trading 1.1% lower
Sentiment slipped today with weaker-than-expected German industrial production data. The index rose 7.8% in May, which is the strongest recovery from the 17.5% decline in April, but it fell short of expectations. Factory orders were released on Monday to show the same pattern.
The indicators show that the European Industry Center is now removing itself from the economic consequences of the Corona virus and the closure. But production is still below the levels recorded before the crisis. This indicates that recovery will take some time.
On the corporate side, there does not seem to be much optimism:
Shares of Italian oil giant Eni (DE: ENI) fell 0.7% after joining Shell (NYSE: RDSa) and BP to write off assets worth € 3.5 billion ($ 3.96 billion). Eni took action because of a weak future price Energy, an indication that the Corona virus will have lasting repercussions for oil sector companies.
While the French food service company Sodexo (PA: EXHO) said that the returns for the third quarter of 2020 will decrease by 30% due to the Corona epidemic, which caused the shares to decline by 2.2%.
In addition, Premier Inn (LON: WTB), owner of White Post, has reported sales falling 80% on a quarterly basis, due to economic closures. Shares fell 3.8%.
On a brighter note, NASDAQ: JD shares rose 2.3% after the sportswear maker announced a pre-tax profit rise for 2020, but still expects 2021 to be hurt by the epidemic.
Corona cases continue to increase in the United States and globally, causing economic concerns, due to the economic strength of the United States. Warning on Monday that the recovery of the American economy is at risk, after the cases in Texas and Florida set records over the weekend, forcing the business to shut down again, Atlanta’s Federal Reserve President Raphael Pustick said on Monday.
Oil prices fell on Tuesday, with the focus shifting to the Institute of Petroleum Management’s report released today after the close on US oil stocks. The previous report stated an increase of 8.1 million barrels. Investors are looking to see whether the new wave of infections from the Corona virus will cause losses to oil demand in the country.
Crude oil futures traded, down 1.1%, at $ 40.20 a barrel. Brent oil futures fell 0.8% to $ 42.74 a barrel.
Gold futures fell 0.46% to $ 1,785.15 an ounce. While the euro fell 0.37% to 1.1265.