European Markets Pulled Back On Mixed Earnings

(RTTNews) - The majority of the European markets ended Thursday's session in the red. A mixed bag of corporate earnings reports and weakness in oil prices weighed on investor sentiment. Meanwhile, the Bank of England appears to have turned more dovish, after fewer hawks than expected voted to raise interest rates.

Investors are also awaiting the release of the U.S. jobs report for July tomorrow. A strong report would likely add to speculation that the Federal Reserve will raise rates in September, while a weak report could provide ammunition for more dovish central bankers to argue that the rate hike should be delayed.

The Bank of England kept its key rate unchanged at a record low in a split vote in August as the majority of policymakers waited for signs of price pressures before starting monetary policy tightening.

The Monetary Policy Committee voted 8-1 to maintain its bank rate at 0.50 percent in the policy session that concluded Wednesday, which was the first split vote this year. Policymakers unanimously decided to keep quantitative easing at GBP 375 billion.

The central bank for the first time released the minutes of the session along with the decision announcement on Thursday. As part of Governor Mark Carney's plan to make policymaking more transparent, the bank simultaneously published the Inflation Report on "Super Thursday".

Ian McCafferty voted to hike the rate by a quarter point. Economists had forecast two dissenters with Martin Weale expected to call for an increase. However, he stood with the majority in August.

One of the dovish members of the MPC, David Miles also voted to keep the rates on hold in his final meeting. His recent comment that the time for a rate hike is coming closer had surprised the markets.

The actual path the Bank Rate will follow over the next few years will depend on the economic circumstances, the bank said in its monetary policy summary.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased by 0.22 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.83 percent.

The DAX of Germany declined by 0.42 percent and the CAC 40 of France fell by 0.09 percent. The FTSE of the U.K. dropped by 0.09 percent and the SMI of Switzerland finished lower by 0.72 percent.

In Frankfurt, Deutsche Telekom declined by 1.82 percent, after posting muted growth in second-quarter net profit.

Merck KgaA finished lower by 1.28 percent, after confirming its 2015 outlook.

Adidas lost 1.34 percent, as the sports goods giant reported 1 percent growth in second-quarter earnings and unveiled plans to shed its struggling TaylorMade golf business.

Metro increased by 3.58 percent, after the retailer reported turnaround results for the third quarter.

Deutsche Post dropped by 3.57 percent. The company reported that its second-quarter consolidated net profit declined by 29.3% to 326 million euros from 461 million euros in the prior year.

Munich Re rose by 1.73 percent, after its second quarter basic earnings per share rose to 6.42 euros, from 4.39 euros last year.

In Paris, Peugeot decreased by 2.09 percent and Renault fell by 1.27 percent.

In London, Rio Tinto Plc rose by 0.25 percent. The mining giant reduced its capital expenditure forecast for 2015 and 2016 after reporting a 43 percent fall in half-year profit.

Aggreko dropped by 4.80 percent, after its profit before tax for the six months ended June 30, 2015 decreased 21 percent to 102 million pounds from 130 million pounds in the prior-year period.

Life and health insurer Aviva rose by 0.85 percent, after it reported a 9 percent increase in first-half profit.

Inmarsat climbed by 6.47 percent, after its Board announced its intention to declare and pay an interim dividend for the 2015 financial year of 19.61 cents per share.

Old Mutual gained 4.81 percent, after its adjusted operating earnings per share for the first half of the year came in at 10.3 pence compared to 8.8 pence last year.

Zurich Insurance fell by 4.63 percent in Zurich, after its first-half attributable net income fell 3 percent to $2.059 billion from $2.123 billion in the previous year.

German manufacturing new orders surged in June, driven by robust demand from abroad, thanks to a weaker euro, dispelling concerns of a slowdown in the largest euro area economy.

Factory orders rose a seasonally-and-calendar adjusted 2 percent from May, when they declined 0.3 percent, figures from the Federal Statistical Office showed Thursday. May's drop was downwardly revised from the 0.2 percent fall estimated initially. Economists had expected a mere 0.3 percent increase for the month. In April, orders grew 2.2 percent.

Germany's construction sector expanded at the weakest pace in six months in July, as output growth eased and new orders fell, survey figures from Markit Economics showed Thursday. The seasonally adjusted Purchasing Managers' Index, or PMI, dropped marginally to 50.6 in July from 50.7 in the previous month.

U.K. industrial production declined unexpectedly on a slump in oil and gas extraction in June, while manufacturing output recovered from the prior month.

Confounding expectations for a 0.1 percent increase, industrial production dropped 0.4 percent in June from May, when it rose a revised 0.3 percent, data from the Office for National Statistics revealed Thursday. This was the first fall in five months.

U.K. house prices dropped unexpectedly in July from June, data from Lloyds Banking Group's Halifax division revealed Thursday. House prices decreased 0.6 percent from June, which was the first fall in five months and confounding expectations for a 0.4 percent rise. Prices had increased 1.6 percent in June.

Following the rebound seen in the previous week, first-time claims for U.S. unemployment benefits saw some further upside in the week ended August 1st, the Labor Department said in a report on Thursday.

The report said initial jobless claims edged up to 270,000, an increase of 3,000 from the previous week's unrevised level of 267,000. Economists had expected jobless claims to rise to 273,000. With the modest increase, jobless claims climbed further off the more than forty-year low of 255,000 set in the week ended July 18th.