European stocks traded almost flat at the opening of the markets on Wednesday. French CAC 40 index slipped after French PMI data. Germany’s DAX index declined ahead of the country’s PMI while Euro STOXX 50 index fell.
French Economic Concerns
The CAC 40 index took a nosedive after French PMI data. France Manufacturing Output index came in at 55.5 in June. It slipped from May’s 58.7 hitting a four-month low.
The France Composite Output Index slightly increased in June. The index came in at 57.1 in June increasing from 57.0 in May. The index hit an eleven- month high in June. This signaled a strong economic growth in the country’s economy.
France Services Activity Index hit a 38-month high in June. The index came in at 57.4 rising from May’s 56.6 figure. The country’s manufacturing PMI closed in a four -month low in June. The index fell to 58.6 in June from 59.4 in May.
The service sector boosted the gains in June as the manufacturing sector cooled down. However, both sectors recorded strong gains in sales which were followed by an increase in rate of jobs’ growth.
The easing of lockdown restrictions in the country drove the sharpest rise in the service sector since April 2018. Manufacturing sector recorded a strong but softer increase in production volumes.
The expansion in the output index was spurred by the high demand for French goods and services. New orders at private sectors businesses grew at the same pace as the one in May. Service providers led the gains in the new orders.
The recovery of other economies saw the new export orders surge for the fifth consecutive month. The rise in input costs and output prices has boosted the growth in French inflation. Supply shortages and high shipping costs have driven the prices paid by private sector firms an inch higher.
CAC 40 Performers
Pernod Ricard was the best performer in the CAC 40 index. The beverage company’s stock gained 3.03% after the company reported strong annual profits with the lifting of Covid-19 restrictions.
ArcelorMittal gained 1.50% weeks after the steel making company announced its plans to buy majority shares in Liberty Steel France. Stellantis was also among the top performers gaining 1.29%.
Among the laggards in the index include Kering, Hermes International and Louis Vuitton. Each of the companies lost 2.45%, 1.84% and 1.47% respectively.