Markets

European Stocks Close Lower as Traders Watch Earnings, Delta Variant; Ericsson Down 9%

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  • The pan-European Stoxx 600 index ended the session down 0.3%, with miners tumbling 2.8% to lead losses.
  • A surge in Covid-19 cases across the continent caused by the highly-transmissible delta variant continues to weigh on investor sentiment.
  • Ericsson shares plunged 9.4% to the bottom of the Stoxx 600 Friday as a decline in sales in mainland China led the Swedish telecoms giant to deliver core earnings slightly below market estimates.

LONDON — European stocks closed lower on Friday as investors monitored economic data, corporate earnings and the spread of the delta Covid-19 variant.

The pan-European Stoxx 600 ended the session down 0.3%, with miners tumbling 2.8% to lead losses as the majority of sectors and major bourses finished in the red. The benchmark was down about 0.7% on the week, having hit a record high on Monday.

On Wall Street, the major U.S. indexes fell Friday as a worse-than-expected consumer sentiment reading overshadowed strong retail sales numbers and earnings reports.

The U.S. consumer sentiment index from the University of Michigan came in at 80.8 for the first half of July, down from 85.5 last month and worse than economists' expectations for an increase.

The survey showed inflation expectations rising with consumers believing prices will increase 4.8% in the next year, the highest level since August 2008. The U.S. consumer price index rose 5.4% in June from a year ago, the fastest pace in nearly 12 years.

In Asia, stocks closed mixed Friday as the Bank of Japan kept its monetary policy unchanged and downgraded its real GDP forecast for 2021 to 3.8% growth, compared with the 4% growth projection made in April.

Back in Europe, euro zone inflation slowed in June, official data confirmed on Friday, with consumer prices rising 1.9% annually after a 2% climb in May, marking the first slowdown since September 2020.

A surge in Covid-19 cases across the continent caused by the highly-transmissible delta variant continues to weigh on investor sentiment, with several major European countries forced to reimplement social restrictions, while the U.K. will take the gamble of removing its last layer of safeguards from Monday.

The U.K. reported 51,870 new coronavirus cases Friday, marking the first time since mid-January that daily infections have risen above 50,000.

Earnings in focus

Earnings season is also beginning in earnest in Europe, with Richemont, Rio Tinto and Ericsson the big names reporting on Friday, while Burberry issued a promising first-quarter trading update.

Ericsson shares plunged 9.4% to the bottom of the Stoxx 600 Friday as a decline in sales in mainland China led the Swedish telecoms giant to deliver core earnings slightly below market estimates.

At the top of the benchmark, SoftBank-backed Swedish cloud computing firm Sinch surged 14.6% after a robust earnings report.

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- CNBC's Ryan Browne contributed to this report.

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