UPDATE 2-European stocks suffer monthly decline as growth worries come to fore

  • Reuters
  • Stock Market News
UPDATE 2-European stocks suffer monthly decline as growth worries come to fore
Credit: © Reuters.

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* Tech stocks among the few gainers as Nokia surges

* STOXX 600 breaks monthly winning run

* European mood sours after weak Wall Street open (Updates to market close)

By Sruthi Shankar

July 31 (Reuters) - European stocks posted their first monthly decline since a market selloff in March on Friday as growing doubts over a global recovery from the coronavirus crisis overshadowed a batch of strong earnings from technology firms.

The pan-European STOXX 600 index .STOXX gave up early gains to close 0.9% lower, pressured by a weak open for Wall Street as optimism from stellar earnings reports from big tech names Amazon AMZN.O , Apple AAPL.O and Facebook FB.O faded. .N

An early reading of the euro zone's economy showed the bloc shrank by a bigger-than-expected 12.1% in the second quarter, its deepest contraction on record as lockdowns ravaged business activity. benchmark index .IBEX dropped 1.7% as the country posted the worst output slump, while GDP in Italy and France also fell sharply but less than forecast.

"Lockdown exits coupled with massive stimulus brought a strong rebound in activity during Q2, which supported the rally in equities, but recovery appears to be levelling off," equity strategists at Barclays (LON: BARC ) wrote in a note.

"Overall, choppy markets could continue due to elevated uncertainty, low conviction and tight summer liquidity."

The STOXX 600 was down about 1% in July, with fears of a resurgence in COVID-19 cases also weighing on the mood as Britain imposed a tougher lockdown in swathes of northern England, while Spain saw a surge in new infections. stocks .SX8P were among the few gainers, up 0.7% after forecast-beating results from Wall Street's tech majors on Thursday. top gainer on the STOXX 600 was Finnish telecom network equipment maker Nokia NOKIA.HE , up 12.5% after reporting an unexpected rise in underlying profit as it reduced low-margin business. strength of numbers from the 'four horsemen of tech' is leading to a halo effect for the tech sector and a resumption of growth stocks leading the market," said Neil Campling, head of TMT research at Mirabaud Securities.

"Nokia results also help sentiment as the key for the equipment stocks is always on margins to get a sense of pricing."

BNP Paribas BNPP.PA rose 0.8% as it earned a higher-than-expected quarterly profit, boosted by a surge in fixed income trading and strong demand for corporate finance. 50% of the companies listed on the STOXX 600 have reported quarterly earnings so far, and 64% of those have surpassed beaten-down profit expectations, according to Refinitiv data.

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