European Equity Benchmarks Close Lower; Consumer Goods, Energy, Real Estate Stocks Fall

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The broad-based major European markets closed lower in Thursday’s trading session, as consumer goods, energy, and real estate stocks burdened the exchanges.

In economic news, Eurostat, the statistical office of the European Union, reported that the share of energy from renewable sources in gross final consumption of energy reached 17% in the European Union (EU) in 2016, double the share in 2004 (8.5%), the first year for which the data are available.

The EU’s target is to obtain 20% of energy in gross final consumption of energy from renewable sources by 2020 and at least 27% by 2030. Sweden had the highest share of its energy coming from renewable sources in 2016 at 53.8%, ahead of Finland (38.7%), Latvia (37.2%), Austria (33.5%) and Denmark (32.2%). The lowest proportions of renewables were registered in Luxembourg (5.4%), Malta and the Netherlands (both 6.0%).

In the UK, gross mortgage lending in December is estimated to have been GBP20.2 billion ($28.8 billion), 1.2% more than the same month last year, according to UK Finance, a banking and financial services sector trade association. Credit card spending decreased slightly in the month, with annual growth in outstanding credit at 5.3%, as business borrowing has continued to moderate through the year.

"December is traditionally a quieter month for mortgages, although the underlying trend of increased numbers of first time buyers, supported by government initiatives such as Help to Buy, continues," said Eric Leenders, managing director of personal finance at UK Finance. "Mortgage rates remain low, driven by a competitive market, so customers should shop around for the best deals."

In Germany, the Federal Statistical Office (Destatis) reported that price-adjusted new orders in the main construction industry in November increased a seasonally and working-day adjusted 9.0% from the previous month. In building construction and civil and underground engineering, in establishments of enterprises with 20 or more persons, new orders increased by 10.7% in nominal terms compared with the same month last year.

In Spain, the number of employed decreased by 50,900 people (-0.27%) in Q4 of 2017 compared to the previous quarter, and stands at just under 19 million, according to the Spanish Statistical Institute (INE). In seasonally adjusted terms, the quarterly variation is 0.39%. Employment in the public sector increased in Q4 by 12,700, while the private sector employment fell by 63,500. In the last 12 months, employment has increased by 401,600 in the private sector, and 88,600 in the public. The number of unemployed rose by 34,900 during the quarter, and stands at 3,766,700.

In equities, software firm The Sage Group, consumer goods company British American Tobacco, and automobile and engine maker Rolls-Royce Holdings led the FTSE lower in London, falling 2.3%, 2.1%, and 2% respectively. They were followed by consumer goods company Imperial Brands, and airline operator International Consolidated Airlines Group, which dropped 1.9% each, while publishing company Reed Elsevier, and investment firm 3i Group each closed 1.8% lower.

In Frankfurt, postal services provider Deutsche Post led the DAX into negative territory, dropping 2.9%, followed by construction materials supplier Henkel, and airline operator Deutsche Lufthansa were down 1.8% and 1.7% respectively. Electricity and natural gas supplier E.ON, software company SAP, real estate firm Vonovia, and consumer goods company Beiersdorf each closed 1.6% lower.

In Paris, airplane manufacturer Airbus led the CAC lower, falling 2.8%, followed by oil services firm TechnipFMC, and media company Vivendia, which lost 2.7% and 1.6% respectively. Automaker Renault, and IT and staffing firm Cap Gemini were down 1.5% and 1.3%, while real estate firm Unibail Rodamco, luxury goods company Kering, and electricity provider Schneider Electric each closed 1.2% lower.

The FTSE fell 0.36%, the DAX dropped 0.87%, and the CAC-40 lost 0.25%.

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