European Stock Indices Drift Lower; Banks Recover After Selloff

Frankfurt (Aug 3)  European stock indices moved lower on Wednesday as a brighter-than-estimated gauge of the eurozone economy made it marginally less likely that the bloc's central bank will cut rates anytime soon.

Markit Economics' updated composite purchasing managers' index for the eurozone came in at 53.2 in July, above the 52.9 "flash" estimate of July 22, and higher than the 53.1 reading in June. The survey adds to recent evidence the eurozone economy is holding up well after the U.K.'s vote to leave the European Union, though Markit pegged the result on German growth. The final eurozone services-sector PMI was also up on the initial estimate and on the June reading.

The European Central Bank meets today though not to set rates. It issues statements after such meetings on an ad-hoc basis. ECB President Mario Draghi said last month he would observe post-Brexit data "in the coming months" before policy makers decided on their course of action on rates.

In Frankfurt the Dax was down 0.44% at 10,099.53 and in Paris the Cac 40 was down 0.74% at 4,296.17. The euro was recently down 0.15% against the dollar at $1.1207

The FTSE 100 in London was recently down 0.16% at 6,635.17.

Banks were in the spotlight after yesterday's selloff.

In London HSBC (HSBC) rose 3.8% in London as news of a $2.5 billion buyback and an increase in the first-half dividend offset the impact of a worse-than-expected first-half profit decline. On a conference call the bank's CFO said it was also considering a second payout to shareholders if it is allowed to draw a dividend from its U.S. operations.

Source: TheStreet