European stock markets fall as traders eye earnings, Fed comments

LONDON — European stocks closed lower on Thursday, dragged lower by energy companies amid lower crude oil prices and a profit warning from Siemens Gamesa.

The pan-European Stoxx 600 tentatively closed down 1% as oil and gas inventories fell 2.7% as crude prices extended losses on Thursday after OPEC+ reportedly reached an agreement on future oil levels. oil production.

Meanwhile, Spanish-German wind company Siemens Gamesa plunged more than 14% to the bottom of Europe’s blue chip index after issuing a second profit warning on Thursday. Parent company Siemens Energy also fell more than 11%.

Elsewhere, traders continued to digest higher-than-expected inflation figures in the US and UK, while dovish comments from Federal Reserve Chairman Jerome Powell did little to improve the outlook. feeling.

British investors reacted to comments by Bank of England Deputy Governor Dave Ramsden, who said on Wednesday that the central bank may have to consider tightening policy sooner than expected as inflation could hit 4% higher. late this year. The FTSE 100 fell 1.1% on Thursday.

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On Wall Street, major U.S. indexes fell even as second-quarter earnings reports continued to beat expectations. Morgan Stanley outperformed in revenue and earnings thanks to strong performance in trading and investment banking.

Meanwhile, the Labor Department reported that initial jobless claims last week hit a new pandemic-era low of 360,000, in line with Dow Jones estimates.

Globally, market sentiment has been rattled by a rapid rise in Covid-19 cases around the world, as the surging delta variant cast doubts on the prospects for economic recovery.

On the data front in Europe, flash UK employment figures for June showed a 1.9% year-on-year rise in May.

In contrast to the Stoxx 600, Czech cybersecurity software company Avast jumped more than 18% after announcing it was in takeover talks with its US counterpart NortonLifeLock.

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– CNBC’s Ryan Browne contributed to this report.