In a significant downturn, European stock markets experienced a pronounced decline during Monday's trading session. The Stoxx Europe 600 index witnessed a substantial drop of 2.22%. Meanwhile, the Swiss Market Index declined by 2.8%, France's CAC fell by 1.42%, the FTSE in London diminished by 2.04%, and Germany's DAX concluded with a 1.95% decrease. The HCOB Eurozone Composite PMI Output Index, which is seasonally adjusted, has revealed a troubling trend, falling to 50.2 in July from a previous 50.9 in June.
This decline indicates a notable loss in business activity momentum across the eurozone. Hamburg Commercial Bank's Chief Economist, Cyrus de la Rubia, remarked, "The eurozone's economy is growing at a snail's pace in July," reflecting the sluggish nature of economic progression in the region. Adding to the economic pressures, industrial producer prices saw a rise of 0.5% in both the euro area and the European Union in June compared to May, as reported by Eurostat, the statistical office of the EU.
However, when juxtaposed with June 2023 figures, there was a concerning decrease of 3.2% in the euro area and 3.1% in the EU, suggesting ongoing deflationary pressures in industrial sectors. Turning to the UK, the service sector showed signs of optimism. Output levels expanded at an accelerated pace in July, highlighted by the S&P Global UK Services PMI Business Activity Index, which rose to 52.5 from a previous 52.1 in June.
This uptick marks the first instance of accelerating growth since April, indicating a positive trend in service-based business activities despite the broader European market challenges. In corporate developments, the US' National Highway Traffic Safety Administration (NHTSA) announced an escalation in its investigation into European automaker Stellantis, particularly concerning a vehicle fire incident involving a 2009 Dodge Journey.
This investigation has transitioned from a preliminary evaluation to an engineering analysis to investigate "other potential causes for door lock malfunction," as detailed in a document dated Thursday on the NHTSA's website. Meanwhile, German biotech firm BioNTech disclosed a wider-than-expected Q2 loss on Monday, attributing it to declining global sales of its COVID-19 vaccine amid decreasing demand.
The company reported a loss of 3.36 euros ($3.68) per share for the quarter, marking a significant shift from a loss of 0.79 euros a year earlier. Consequently, BioNTech's shares closed 4.2% lower in Frankfurt, reflecting investor concerns over the sustainability of its revenue streams. Also in the spotlight, French financial services company Societe Generale stated on Monday that it has finalized an agreement to sell its private banking units in the UK and Switzerland to Swiss private banking firm Union Bancaire Privee for a substantial 900 million euros ($984 million).
Following this announcement, Societe Generale saw its shares decline by 0.9% in Paris. Furthermore, French cosmetics giant L'Oreal revealed its plans to acquire a 10% stake in Swiss skincare firm Galderma, resulting in a 1% increase in L'Oreal's shares in Paris, highlighting ongoing strategic investments in the beauty sector. Lastly, Dutch conglomerate Royal Philips announced plans for a share repurchase of up to 125 million euros ($136.8 million) to fulfill a portion of its obligations under long-term incentive plans, indicating a commitment to enhancing shareholder value amidst current market fluctuations..