By Susan Mathew
Jul 24 (.) – European stocks posted their biggest drop in a month on Friday as confidence in world markets declined after Beijing ordered the United States to close its consulate in a Chinese city in retaliation for a move. similar taken by Washington.
* In a session in which all sectors closed in the red, the losses were led by technology stocks such as SAP and ASML.
* The pan-European STOXX 600 index fell 1.7%, causing its first weekly loss in four weeks. The rise in global COVID-19 cases was also a negative factor in the session, as investors fear that measures to contain the disease could reverse a rebound in business activity.
* PMI data on Friday showed that Germany’s manufacturing sector avoided contraction for the first time in 19 months in July, while reports from the euro zone showed that trade activity in the bloc had returned to growth.
* “The sharp rise in the euro zone compound PMI is an encouraging sign that the economic recovery continued at a good pace at the beginning of the third quarter,” said Jack Allen-Reynolds, Europe economist at Capital Economics.
* “But we suspect that activity will remain below pre-crisis levels for at least the next two years,” added Allen-Reynolds, who also noted that employment PMIs remain well below 50, the mark. that separates contraction from growth.
* The German DAX index fell 2%, while the British index hit two-week lows.
* A € 750 billion EU recovery fund and hopes of an eventual COVID-19 vaccine had prompted European actions on track to end the week on the rise, but the US order to shut down the consulate Chinese in Houston reversed the trend and generated a weekly drop of 1.5% in the STOXX 600 index.
* Washington’s move sparked Chinese retaliation, which led to the closure of the United States Consulate in Chengdu.
(Report by Susan Mathew. Edited in Spanish by Rodrigo Charme)