RTTNews - The European markets fell on Friday, as heavily weighted energy stocks slipped on declining crude oil prices and investors were worried about forthcoming corporate earnings.
A report released by Reuters and the University of Michigan revealed today that the preliminary reading on the consumer sentiment index for July came in at 64.6 compared the final reading of 70.8 for June. Economists had been expecting a more modest decrease to a reading of about 70.0.
Crude for August delivery fell $0.97 to $59.44 a barrel on the New York Mercantile Exchange, by the time the European markets closed, on growing pessimism about the economy. The contract traded as low as $58.72 earlier in the session.
The FTSEurofirst 300 index of pan-European blue chips closed 1.10% lower at 814.29 points, while the narrower DJ Stoxx 50 index fell 1.20% to 2,016.25 points.
Around Europe, the U.K.'s FTSE 100 index fell 0.76% to 4,127.17, while France's CAC 40 index dropped 1.42% to 2,983.10 and Germany's DAX index slipped 4,576.31.
Oil stocks fell on weaker crude oil prices and a warning of weaker refining margins from U.S. oil giant Chevron Corp. BP, Europe's biggest oil company, declined 0.7%, while Royal/Dutch Shell, the second biggest, slipped 1% and Total, the third biggest, dropped 1.7%.
Drugmakers were among the biggest losers, as concerns grew about their future earnings prospects. Novartis will be the first major drugmaker to report second quarter earnings next week. Novartis fell 1.7%, while another Swiss drugmaker Roche dropped 2.4% and French drugmaker Sanofi-Aventis slipped 2.3%.
Banking stocks were also under pressure because of growing uncertainty about corporate earnings. BNP Paribas, France's largest bank, slipped 2%, while Banco Santander, Spain's largest, fell 1% and UBS, the biggest Swiss lender, dropped 2.4%.
Bank of Ireland slid 7.7% and Allied Irish Banks dropped 8.3% on concern legislation setting the National Asset Management Agency may be delayed.
British insurer Aviva lost 5.5% after an analysts said the company will be forced to cut its dividend payout by 50%.
On the other hand, Infineon, Europe's second biggest chipmaker, rose 5.4% after the company announced a ?725 million rights offer to repay debt and strengthen liquidity.
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