Europe open: Stocks off sharply as German GDP falls by most in half a century
Stocks on the Continent were falling sharply on Thursday after second quarter German gross domestic product data revealed the largest drop on record since 1970.
"A double-digit percentage decline in the German economy and abysmal results from Lloyds have put the cat among the pigeons this morning," said IG chief market analyst Chris Beauchamp.
"[...] Continuing indications of a rise in virus cases throughout Europe have added to the caution, with markets worrying that Q2 was not the last quarter of significant economic weakness."
As of 1007 BST, the German Dax Was down by 2.01% to 12,564.16, alongside a 1.4% fall on the Italian FTSE Mibtel to 19,602.45.
Tellingly, euro/dollar was moving lower as well, retreating 0.45% to 1.1734.
The pan-European Stoxx 600 was faring better but was nevertheless down 1.0% at 363.78.
Cyclical areas of the stock market were particularly weak, with the Stoxx 600 sector gauge for Automobiles&Parts down 3.01% to 392.87 and another for lenders' shares off by 2.62%.
Airbus shares were in focus after the manufacturer posted a larger than expected second quarter loss, offset by an outlook for reduced cash outflows in the back half of 2020.
German gross domestic product data underlined the severity of the downturn in the single currency bloc, although the latest unemployment figures offered a glimmer of hope.
Economic growth in Germany slumped by 10% over the three months to June, marking the biggest quarter-on-quarter decline since at least 1970 and was down by an annualised 11.7%, according to the Federal Office of Statistics.
That compared to a 4.7% quarterly drop in the first quarter of 2009 and a 7.9% annualised fall in the second quarter of 2009.
Unemployment however only rose by 69,000 last month (consensus: 120,000) to reach 2.943m, Germany's Labour Office said, pushing the unemployment rate from 6.3% to 6.4%.
Further south, ISTAT announced a 149,000 person jump in the number of unemployed to reach 2.204m.