European equities were trading in the red on Thursday morning despite encouraging data on Germany’s economic growth, rising oil prices and an increase in the value of homes in the UK.
Seen as the powerhouse of Europe, Germany posted a steady increase in its annual economic growth in 2016. Gross domestic product (GDP) rose by 1.9% on an annual average in 2016 on the previous year, according to Destatis, Germany’s federal statistics agency. In the previous two years, the level of GDP growth was similar, rising by 1.7% in 2015 and 1.6% in 2014.
In the UK, house prices rebounded in the final quarter of 2016, according to the latest data from the Halifax House Price Index, administered by IHS Markit. The 2.7% quarterly rise in the fourth quarter meant that UK house price levels more than recovered from the dip seen in the third quarter, when prices declined at the fastest pace for over five years, falling by 0.6%.
And oil prices were extending gains from the previous day despite government data showing a bigger-than-expected increase in US oil inventories on Wednesday. West Texas Intermediate crude oil futures, the main US oil gauge, were 0.5% higher at $52.50 per barrel while Brent crude oil futures, the main international oil benchmark, were 0.8% higher at $55.53 per barrel.
US stockpiles of oil rose by 4.1 million barrels to 483.1 million barrels in the week ended January 6, according to data published by the Energy Information Administration ( EIA ) on Wednesday. The build was more than the 1.5 million barrel weekly increase that had been predicted by the American Petroleum Institute on Tuesday and was a departure from the movement recorded in the prior week, when US inventories of oil fell by 7.1 million barrels.
In equities, health care companies Shire and Hikma Pharmaceuticals were 3.7% and 2.6% lower, respectively, on London’s FTSE 100 Index while Associated British Foods was down by 3.2% and television company ITV was 2.8% lower.
On Frankfurt’s DAX, Deutsche Telekom and Merck, a pharmaceutical company, were both 1.9% lower while Continental, an automotive supplier, and Siemens, a technology company, were both down by 1.0%. And, on Paris’ CAC-40, Essilor International, an ophthalmic optics company, was down by 2.3%, followed by Publicis Groupe, a communications company, down by 1.6% and health care company Sanofi, 1.2% lower.
The pan-European Stoxx 600 Index was 0.46% lower, London’s FTSE 100 Index, was down by 0.26%, Frankfurt’s DAX, was down by 0.57% and Paris’ CAC-40, 0.43% was lower at the time of writing.
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