European Markets Pulled Back On Light Data Day

(RTTNews) - The majority of the European markets ended Friday's session in negative territory. The continued strength of the U.S. dollar drove commodity prices lower at the end of the trading week. Mining and resource stocks were under pressure, as well as energy stocks. Banks also dipped following their recent rally.

However, automakers turned in a solid performance, after Volkswagen announced restructuring.

Global economic data was on the light side Friday and there was also very little corporate news to drive trading.

Despite the many encouraging trends in the euro area economy, the recovery remains highly reliant on easy financing conditions, European Central Bank President Mario Draghi said Friday.

"The ECB will continue to act, as warranted, by using all the instruments available within our mandate to secure a sustained convergence of inflation towards a level below, but close to 2 percent," he said at the European Banking Congress in Frankfurt.

Unconventional measures change the risk-reward balance and character of monetary policy and hence, they must be used with extra care, European Central Bank Governing Council member Jens Weidmann said Friday.

"Unconventional measures not only change the risk-reward calculus of monetary policy. They also change its character," Weidmann, who heads the German Bundesbank, said at the European Banking Congress in Frankfurt.

The policymaker also noted that most unconventional tools intervene directly in other markets and this makes it more difficult to contain market distortions. Interventions in individual market segments also harbor the risk that additional interventions might have to follow in order to curb their distortional effects, he added.

"Unconventional instruments should be used with extra care - even if they are used only temporarily," Weidmann said.

The Bank of England could do more to prevent a rise in unemployment if there was no inflationary pressure brought on by the weakening in the pound sterling, Deputy Governor Ben Broadbent said Friday.

"The MPC [Monetary Policy Committee] would be less inclined to accommodate above-target inflation if it didn't also expect demand to fall slightly short of that supply potential; it would be able to do more to prevent any rise in unemployment if it weren't for the inflationary pressure brought about by the fall in the currency," Broadbent said in a speech.

The pan-European Stoxx Europe 600 index weakened by 0.28 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.69 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.42 percent.

The DAX of Germany dropped 0.20 percent and the CAC 40 of France fell 0.52 percent. The FTSE 100 of the U.K. declined 0.28 percent and the SMI of Switzerland finished lower by 0.75 percent.

In Frankfurt, Volkswagen fell 0.66 percent after the automaker and its labor unions agreed to a turnaround plan to save billions of dollars for the company.

Shares of BMW increased 0.88 percent. Renault climbed 0.19 percent and Peugeot rose 0.43 percent in Paris.

In Paris, Airbus decreased 0.52 percent after Japanese firm Peach Aviation ordered a total of 13 commercial aircraft from the company.

In London, Rio Tinto fell 2.80 percent. The government of Guinea has called on the mining giant to explain what it had found in an internal investigation that led to the firing of two senior executives.

Mining stocks were under pressure due to falling precious metal prices. Fresnillo dropped 6.86 percent and Randgold Resources surrendered 4.85 percent. Antofagasta declined 3.13 percent and Anglo American fell 3.28 percent. Polymetal International weakened by 3.30 percent and Glencore forfeited 2.15 percent.

Building materials giant LafargeHolcim dropped 1.91 percent in Zurich after cutting its mid-term profit outlook.

The euro area current account surplus decreased in September, the European Central Bank said Friday. The current account surplus fell to EUR 25.3 billion in September from EUR 29.1 billion in August, which was the highest surplus in three months.

Germany's producer prices declined at a slower pace in October, data from Destatis showed Friday. Producer prices declined by less-than-expected 0.4 percent in October from prior year after falling 1.4 percent in September.

Leading U.S. economic indicators inched higher for the second consecutive month in October, the Conference Board said in a report on Friday. The Conference Board said its leading economic index crept up by 0.1 percent in October after edging up by 0.2 percent in September. The uptick by the index matched economist estimates.