July 6, 2016 - 8:20 AM EDT
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European Markets Tumbled Further Amidst Brexit Concerns

VIENNA (dpa-AFX) - The European markets ended Wednesday's session with significant losses, extending its losing streak to three sessions. Disappointing German economic data was partly responsible for today's pullback, but continued concerns over the U.K. exit of the European Union was the real culprit.

The uncertainty surrounding fallout of an eventual Brexit is weighing on investor sentiment and has sent them fleeing for safe havens. Insurers in the U.K. are now freezing withdrawals from their real estate funds. Financial stocks took a beating due to concerns over the Italian banking sector. Low interest rates and the outlook for the region are also taking their toll on shares of European banks.

Energy stocks were also under pressure, as crude oil prices continue to retreat.

Gold stocks were among the few bright spots Wednesday, as investors pour into safe havens. Government bonds have also experienced a surge in interest, driving bond yields even lower.

Further improvements in investor and customer confidence are needed for Greek authorities to lift bank capital controls, introduced in June 2015 when the "Grexit" crisis played out, Fitch Ratings said Wednesday.

"In our view, the economic and political environment remains fragile and confidence has not yet returned to the financial system," the rating agency said in a statement.

"Capital controls could be gradually relaxed from late 2016 if the political and operating environments are stable and Greece continues to deliver the reforms envisaged in its economic adjustment programme."

Sweden's central bank kept its negative interest rate unchanged and postponed the future rate hikes on Wednesday.

The Executive Board of the Riksbank decided to hold the repo rate unchanged at -0.50 percent and assessed that there will be a longer delay until the repo rate begins to be raised.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 1.83 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.67 percent.

The DAX of Germany dropped 1.67 percent and the CAC 40 of France fell 1.88 percent. The FTSE 100 of the U.K. declined 1.25 percent and the SMI of Switzerland finished lower by 0.55 percent.

In Frankfurt, Deutsche Bank sank 5.52 percent and Commerzbank weakened by 3.53 percent.

RWE fell 3.65 percent and peer E.ON surrendered 3.04 percent.

In Paris, industrial gas maker Air Liquide tumbled 4.17 percent. The company said it is targeting revenue growth of 6-8 percent annually over the 2016-2020 period following the Airgas acquisition.

Credit Agricole decreased 2.15 percent and BNP Paribas lost 1.94 percent. Societe Generale also finished lower by 1.46 percent.

In London, property stocks such as Berkeley Group Holdings, Taylor Wimpey and Barratt Developments lost 2-5 percent, after M&G joined Standard Life Investments and Aviva in suspending trading on its property fund in order to meet redemptions.

Life and health insurer Aviva retreated 6.15 percent despite promising higher dividends in 2017. Standard Life dropped 3.50 percent and Prudential fell 4.32 percent.

Tesco plunged 8.05 percent after HSBC downgraded its rating on the stock to "Hold" from "Buy." Wm Morrison Supermarkets also fell 7.21 percent.

easyJet weakened by 3.60 percent. The company reported load factor of 94.1% for June 2016 compared to 92.7% in the prior year.

Fresnillo climbed 6.08 percent on rising gold prices, while Randgold Resources increased 4.35 percent.

Caixabank dropped 1.63 percent in Madrid after saying it expects a 1.25 billion euro hit from the retroactive removal of mortgage floor clauses.

Telecom Italia plunged 10.81 percent in Milan after French rival Iliad said it would enter the Italian telecoms market.

Germany's factory orders remained unchanged in May, despite an increase in demand from euro area economies. Factory orders stayed flat from April, when they fell by a revised 1.9 percent, the biggest decrease since July 2015, provisional data from Destatis showed Wednesday.

Economists had forecast orders to grow 1 percent after April's initially reported 2 percent decline.

Germany's construction activity expanded at the weakest pace in ten months in June, survey figures from Markit Economics showed Wednesday. The construction Purchasing Managers' Index, or PMI, fell to 50.4 in June from 52.7 in May.

U.K. shop prices declined at a faster pace in June, the British Retail Consortium said Wednesday. Shop prices decreased 2 percent in June from a year ago, which was bigger than May's 1.8 percent decline.

Britons' housing equity injections reached its lowest level since early 2008, the Bank of England said Wednesday. Households injected GBP 4.86 billion in the first quarter, compared to GBP 8.19 billion in the prior quarter. This was the lowest since the first quarter of 2008.

Primarily reflecting a jump in the value of imports, the Commerce Department released a report on Wednesday showing that the U.S. trade deficit widened by more than expected in the month of May. The report said the trade deficit widened to $41.1 billion in May from $37.4 billion in April. Economists had expected the deficit to widen to $40.0 billion.

Economic activity in the U.S. service sector grew faster than expected in the month of June, the Institute for Supply Management revealed in a report released on Wednesday. The ISM said its non-manufacturing index jumped to 56.5 in June from 52.9 in May, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 53.3.

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Source: Equities.com News (July 6, 2016 - 8:20 AM EDT)

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