Europe Markets

European stocks close mixed as investors monitor U.S.-China tensions and earnings

Key Points
  • The pan-European Stoxx 600 closed marginally higher, with sectors and major bourses pointing in opposite directions.
  • Traders monitored rising U.S.-China tensions, disappointing U.S. unemployment data and a slew of corporate earnings.

European stocks closed mixed Thursday as investors reacted to rising U.S.-China tensions and a slew of corporate earnings.

The pan-European Stoxx 600 closed marginally higher, with sectors and major bourses pointing in opposite directions.

Tensions between China and the U.S. escalated this week after the U.S. claimed two Chinese hackers targeted American companies working on virus research and were stealing information from companies around the world, both for profit and on behalf of the Chinese government.

Then, the U.S. ordered the shutdown of China's Houston consulate, claiming it was a necessary step to protect intellectual property and the data of private citizens. The move drew condemnation from China's foreign ministry as it warned of firm countermeasures if the U.S. does not reverse its decision.

On Wall Street, stocks fell as Microsoft led shares of major tech companies lower and traders pored through disappointing unemployment data. 

The U.S. Labor Department revealed Thursday that weekly initial jobless claims came in at 1.416 million for the week ended July 17, slightly worse than the 1.3 million expected and marking the 18th consecutive week that more than 1 million new unemployment claims have been filed.

Back in Europe, German consumer confidence has soared on the back of a return to economic activity and landmark stimulus measures in Europe, new data revealed Thursday. The forward-looking GfK Institute consumer confidence reading rose to -0.3 for August compared to -9.4 in July.

Earnings in focus

Roche posted a 5% fall in net profit for the first half of the year on Thursday, with net income coming in at 8.5 billion Swiss francs ($9.15 billion) as the coronavirus pandemic and a strong Swiss franc weighed on earnings. Sales also fell 4%, but the Swiss drugmaker maintained its 2020 outlook.

Unilever reported a much smaller-than-expected 0.3% fall in quarterly sales Thursday, with analysts having forecast a 4.3% decline. The Anglo-Dutch consumer goods company's shares jumped 8.5% in early trade.

Daimler saw a second-quarter loss of 1.68 billion euros ($1.9 billion) but projected a rise in profit this year for its Mercedes-Benz cars and vans division as sales begin to rebound.

In terms of individual share price action, Finnish biofuel producer Neste rallied more than 11% after reporting a smaller-than-expected 31% fall in second-quarter profit. Publicis Groupe shares also climbed 8% after the French advertising company beat profit expectations.

At the other end of the European blue chip index, British derivatives trading provider IG Group fell 11%. The company flagged a return to normal in markets after volatile trading caused profits to surge in the last quarter.

— CNBC's Patti Domm, Saheli Roy Choudhury and Thomas Franck contributed to this market report.