In Thursday's trading, European stock markets experienced a notable downturn, with The Stoxx Europe 600 index declining by 1.29%. The French market was particularly impacted, as the CAC 40 registered a loss of 2.14%. Furthermore, the FTSE 100 in London dropped by 1.01%, and Germany's DAX index closed lower by 2.28%.
In contrast, the Swiss Market Index was closed due to a national holiday. Amid this backdrop, the Bank of England cast a pivotal vote that resulted in a decision to lower interest rates by a quarter percentage point, bringing the rate down to 5% from the previous 5.25%. This decision was contentious, with the vote reflecting a narrow margin of five to four.
While the majority opted for the rate cut, four members of the committee argued for maintaining the status quo. Looking at unemployment trends in the euro area, the seasonally adjusted unemployment rate stood at 6.5% in June, a modest increase from 6.4% in May, but unchanged compared to the same month last year, as reported by Eurostat.
In parallel, the unemployment rate across the European Union remained steady at 6.0% for June, with Spain exhibiting the highest unemployment rate at 11.5% and Czechia boasting the lowest at 2.7%. In terms of manufacturing insights, the HCOB Eurozone Manufacturing PMI, which reflects the general health of factories across the eurozone and is compiled by S&P Global, remained stagnant at 45.8 in July, mirroring June's results.
Conversely, the UK experienced a brighter outlook, as the seasonally adjusted S&P Global UK Manufacturing Purchasing Managers' Index rose to a two-year peak of 52.1 in July, a noteworthy increase from June's figure of 50.9. Corporate news highlighted significant movements, particularly with the European Commission approving the proposed acquisition of Juniper Networks by Hewlett Packard Enterprise.
Following an extensive market investigation, the Commission concluded that this deal would not raise any competitive concerns within the European Economic Area. In the realm of stock performance, Luxembourg-based ArcelorMittal, a leading steel and mining company, witnessed its shares plummet by 4.5% in Paris after reporting disappointing earnings and revenues for Q2.
On a more positive note, shares of Anheuser-Busch InBev rose by 2.3% on Euronext following the company's announcement of Q2 earnings and revenue that surpassed analyst expectations. However, bank stocks endured a challenging day, with major players including NatWest Group and HSBC experiencing declines of 8.1% and 6.5% respectively in London.
Other banks such as Standard Chartered and Lloyds Banking saw their shares drop by 6% and 5.7% respectively, while Barclays concluded the day down by 4.7%. In Paris, Societe Generale and BNP Paribas fell by 9% and 3.2% respectively, while Germany's Commerzbank and Deutsche Bank faced declines of 5.4% and 3.1% respectively in Frankfurt..