European stock markets experienced a significant downturn in trading on Friday, with the Stoxx Europe 600 index falling by 1.07%. This decline was mirrored by several major indexes: the Swiss Market Index dropped 1.02%, France's CAC saw a loss of 1.07%, the FTSE in London declined by 0.73%, and Germany's DAX was down by 1.48%.
This general malaise in the markets was likely influenced by the latest economic indicators affecting investor sentiment. Recent estimates from Eurostat indicate that the European Union and euro area experienced a slowdown in seasonally adjusted GDP growth in the second quarter, which decelerated to 0.2% after a rise of 0.3% in the first quarter.
When compared year-over-year, seasonally adjusted GDP saw an increase of 0.6% in the euro area and 0.8% in the EU. These figures suggest that while there is still growth, the pace is slowing, raising concerns among investors. In Germany, the situation in the manufacturing sector appears precarious, with price-adjusted production reportedly falling by 2.4% in July compared to June, according to preliminary data released by the Federal Statistical Office.
Such a decline adds to fears regarding the robustness of Germany's industrial output in an already uncertain economic backdrop. Turning to the United Kingdom, there were some signs of stability as house prices rose by 0.3% in August compared to July, and a notable 4.3% year-over-year increase was recorded, as per Halifax's House Price Index.
This annual increase marks the largest rise in UK house prices since November 2022, potentially indicating a resilient property market amidst broader economic challenges. Meanwhile, in Italy, the retail sector showcased modest growth, with the seasonally adjusted retail trade index increasing by 0.5% in value terms in July compared to June.
The volume of sales also grew by 0.3% in the same comparison. Year-over-year, the value of retail trade rose by 1.0%, while the sales volume experienced a slight increase of 0.1%. These results reflect consumer confidence that appears to be holding despite broader economic pressures. In the realm of corporate news, the Netherlands announced on Friday that it is expanding its national export control measures regarding advanced semiconductor manufacturing equipment.
This update signifies that more types of chipmaking apparatus will require national authorization, with the implementation of this requirement set to take effect on Saturday. Dutch Minister for Foreign Trade and Development, Reinette Klever, articulated that this decision was made for security reasons, highlighting that technological advancements have led to increased security risks tied to the export of such specialized manufacturing equipment. In response to the Netherlands' announcement, Dutch semiconductor company ASML expressed its belief that the new requirement will align the approach for issuing export licenses.
Furthermore, ASML noted that it would now need to apply for export licenses through the Dutch government rather than the US government for its TWINSCAN NXT:1970i and 1980i DUV immersion lithography systems shipments, effectively changing the landscape of the supply chain for these crucial technologies. Additionally, GSK reported on Friday the successful outcome of a phase 3 trial evaluating Nucala in adults suffering from chronic obstructive pulmonary disease (COPD).
The British pharmaceutical giant announced that the trial met its primary endpoint, revealing statistically significant and clinically meaningful reductions in the annualized rate of moderate to severe exacerbations when compared to a placebo. This positive news may bolster GSK’s portfolio and investors’ confidence in its therapeutic capabilities..