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European Equity Benchmarks Close Lower, Led by Falling Financial, Automotive Stocks

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Last updated: 08/12/2019 12:51:58

12:51 PM EDT, 08/12/2019 (MT Newswires) -- The broad-based major European indices closed lower in Monday trading as financial and automotive stocks weighed down the markets.

In economic news, the EU's European Asylum Support Office reported that preliminary analyses reveal that in the first half of 2019 337,200 applications for asylum were lodged in the EU, a 10 % increase from the same period a year earlier. In contrast to this upward trend, in June applications fell to the lowest level of the year.

Citizens of Syria, Afghanistan and Venezuela continued to lodge the most applications, with only Syrians seeking asylum in reduced numbers. Applicants from several Latin-American countries have already lodged the same, or higher, number of applications as in all of 2018. These citizenships are all exempt of visa requirements when entering the Schengen area, now accounting for more than one in four applications in the EU. The Schengen Area is an area made up of 26 European states that have officially abolished all passport and all other types of border control at their mutual borders.

Meanwhile, only half of UK regions saw an increase in business activity again in July, according to the most recent NatWest UK Regional PMI survey, with the same result for employment and inflows of new business. Wales and London were the two fastest-growing areas for business activity during the month as the Wales Business Activity Index climbed to a five-month high of 53.2, and London recorded a reading of 52.8 -- its highest since September of 2018. However, despite the improvements the figures remained lower than their respective long-run averages.

The East of England (51.6) and Yorkshire & Humber (51.0) both saw modest increases in private sector output in July, while there was negligible growth in the North West and Scotland, with both registering a score of 50.2.

Also in the UK, the Office for National Statistics (ONS) reported that while all economic well-being measures improved in the latest quarter ending March, people's personal well-being showed very little change in the UK in the year ending March. The ONS also said people's expectations for the economy for the year ahead are that it will worsen.

While people in the UK reported slightly higher happiness ratings on average, about 4.2 million people continued to report low levels of happiness in the year ending March. Net financial wealth per head increased by 3.0% for the quarter ending March, compared with the same quarter a year ago, led by rises in equity and investment fund shares. Anxiety in the UK remained unchanged with no significant decrease in the proportion of people who reported the highest anxiety ratings. Expectations for higher unemployment for the year ahead have been rising, and are now higher than at any time in the past five and a half years.

In Germany, unemployment among young people aged 15 to 24 years was the lowest in 2018 since German reunification, according to the Federal Statistical Office (Destatis). The unemployment rate of the age group was 6.2% in Germany as a whole. The highest level of youth unemployment was recorded in 2005, when the unemployment rate of 15 to 24 year olds was 15.2%.

And in Ireland, the Ulster Bank Construction Purchasing Managers' Index (PMI) signaled a modest expansion of Irish construction activity as it fell to 51.4 in July from 53.1 in June. The rate of increase was the slowest in the current 71- month sequence of growth.

For the seventh consecutive month, the housing subcategory recorded the fastest rise in activity of the three monitored sub-sectors in July. However, the rate of expansion eased to a six-month low. Commercial activity also increased solidly over the month. Meanwhile, civil engineering activity declined for the 11th straight month and at the fastest pace since November 2018.

"Irish construction firms continued to report rising activity levels in July," said Simon Barry, chief economist Republic of Ireland at Ulster Bank. "However, the pace of activity growth lost further momentum last month to leave the rate of expansion at its slowest in almost six years. The sub-sector detail painted a mixed picture. Growth in commercial activity picked up to a four-month high, but this was offset by weaker performances in civil engineering and in housing."

In equities, NMC Health led the FTSE lower in London falling 5.6%, followed by asset management firm Schroders, automaker Rolls Royce, and financial services firm Hargreaves Lansdown, which lost 3.6%, 3.5%, and 3.4% respectively. Luxury goods company Burberry Group, turnaround firm Melrose Industries, and food processing com Associated British Foods were down 3.3%, 2.7%, and 2.2%, while real estate investment trust company British Land, chemicals company Johnson Matthey, and bank Standard Chartered each closed 2% lower.

In Frankfurt, Deutsche Bank led the DAX into negative territory, losing 5.5%, followed by industrial group Thyssenkrupp, tire maker Continental, and airline operator Lufthansa, which fell 3%, 2.8%, and 2% respectively. Internet company Wirecard, pharmaceutical company Bayer, and electricity and natural gas provider RWE were off 1.7%, 1.4%, and 1.1% respectively, while semiconductor company Infineon, and construction materials supplier HeidelbergCement each closed 1% lower.

And in Paris, banks helped weigh down the CAC as Societe Generale, Credit Agricole, and BNP Paribas closed 2.2%, 1.8%, and 13% respectively. Luxury goods company Louis Vuitton, and steel and mining company ArcelorMittal lost 2.1% and 1.8% respectively, while oilfield services company TechnipFMC dropped 1.7%. Automaker Renault, and luxury goods company Kering were down 1.5% and 1.3%, while software firm Dassault Systemes, and industrial conglomerate Bouygues each closed 1.1% lower.

The FTSE was down 0.37%, the DAX lost 0.12%, and the CAC-40 fell 0.33%.

Price: 24.94, Change: -0.21, Percent Change: -0.83

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