European Markets Dropped Again On China Concerns & Greece Elections

(RTTNews) - The European markets ended Friday's session solidly in negative territory, capping the weakest trading week so far in 2015. Investor concerns over upcoming snap elections in Greece and the continued sell-off in the Chinese stock market dampened sentiment.

The Shanghai Composite Index plunged by 4.3 percent Friday. Disappointing Chinese manufacturing data and continued weakness in commodity prices had a negative impact on European mining and metal companies at the end of the week. Energy stocks were also under pressure, with crude oil prices near a 5-year low.

The manufacturing sector in China continued to struggle in August as the contraction accelerated, a preliminary survey from Caixin showed on Friday, with a Performance of Manufacturing Index score of 47.1. That's down from 47.8 in July, and it represents a 77-month low.

Greek Prime Minister Alexis Tsipras tendered his resignation late Thursday, paving the way for snap elections next month. Elections are expected to be held on September 20. Tsipras said he felt a moral obligation to place the third bail-out deal in front of the people to allow them to judge both what he achieved, and his mistakes. The move by Tsipars is seen as an attempt to quell a rebellion in his leftist Syriza party.

Rebel MPs of the ruling left-wing Syriza party have decided to leave it and form a new party. Greek media reported that 25 hardline MPs together have named the new party Leiki Anotita (Popular Unity) under the leadership of former Energy Minister Panagiotis Lafazanis, who was against the bailout deal.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased by 3.17 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 3.29 percent.

The DAX of Germany declined by 2.95 percent and the CAC 40 of France fell by 3.19 percent. The FTSE of the U.K. dropped by 2.83 percent and the SMI of Switzerland finished lower by 3.36 percent.

In Frankfurt, Deutsche Lufthansa sank by 5.65 percent.

Fresenius dropped by 5 percent and Fresenius Medical Care lost 4.54 percent. Merck decreased by 3.80 percent and Bayer finished lower by 3.34 percent.

RWE fell by 4.26 percent and E.ON surrendered 3.88 percent.

In Paris, Airbus declined by 4.51 percent and Peugeot lost 4.60 percent.

Societe Generale fell by 4.26 percent and BNP Paribas weakened by 3.87 percent. Credit Agricole also finished down by 2.53 percent.

In London, Shire dropped by 5.28 percent and Hikma Pharmaceuticals lost 4.09 percent.

EasyJet decreased by 4.58 percent and Carnival fell by 4.44 percent.

Royal Vopak, which reported half-year report, plunged by 15.12 percent in Amsterdam.

Eurozone consumer confidence strengthened for the first time in five months during August, preliminary data from the European Commission revealed Friday. The flash consumer confidence index for the euro area rose to -6.8 from July's -7.1. Economists had expected a -6.9 reading.

Eurozone private sector growth improved in August underpinned by German activity, while the expansion in France eased to a four-month low, signaling the widening divergence between two largest euro area economies.

At 54.1, the flash Purchasing Managers' Index ticked higher from July's final reading of 53.9 and remained at an expansionary level for the twenty-sixth successive month, preliminary data from Markit Economics showed Friday.

The pace of increase was one of the fastest seen over the past four years and stayed above the expected level of 53.7.

Germany's private sector grew at the fastest pace in four months in August, flash survey data from Markit revealed Friday. The flash composite output index rose to 54 in August from 53.7 in July. The reading reached a 4-month high in August.

The French private sector growth slowed to a 4-month low in August, flash survey data from Markit Economics showed Friday. The composite output index fell to a 4-month low of 51.3 in August from 51.5 in July.

German consumer sentiment is set to drop unexpectedly in September, as economic and income expectations floundered despite Greece reaching an agreement on a controversial debt deal. The forward-looking consumer sentiment index fell to 9.9 in September from 10.1 in August, survey data from market research group GfK showed Friday. Economists had forecast it to remain unchanged at 10.1.

The U.K. logged its first July budget surplus since 2012, the Office for National Statistics showed Friday. Public sector net borrowing excluding public sector banks decreased by GBP 1.4 billion to a surplus of GBP 1.3 billion or equivalent to -0.1 percent of gross domestic product in July.

This was the first reported July surplus since 2012. Economists had forecast a surplus of GBP 1.1 billion.

British households perceive that the value of their home increased in August, a survey from Knight Frank and Markit Economic showed Friday. The house price sentiment index, or HPSI, rose to 59.5 in August from 58.6 in the previous month. This marked the twenty-ninth successive month of the index remaining above 50.