European Markets Slipped Further On "Brexit" Concerns

(RTTNews) - The European markets ended Thursday's session firmly in negative territory, extending its losses from the previous session. Investor concerns over the upcoming referendum on whether the U.K. will remain a part of the European Union weighed on investor sentiment. Traders are worried that a "Brexit" would spark further exits from the EU.

Crude oil prices reached a 10-month high of over $51 a barrel on Wednesday, but pulled back on Thursday as investors locked in profits. The recent strengthening of the Euro also contributed to the negative mood among investors. The Euro has been rising since it has become apparent the that the Federal Reserve will likely be unable to raise interest rates in June.

Eurozone must hasten with structural reforms in order to avoid the lasting economic damage that weak growth and productivity entail, European Central Bank President Mario Draghi said Thursday.

"There are many understandable political reasons to delay structural reform, but there are few good economic ones," Draghi said in a speech at the Brussels Economic Forum. "The cost of delay is simply too high."

A committed central bank can always fulfill its mandate irrespective of the stance of other macroeconomic policies, Draghi said. However, monetary policy does not exist in vacuum as other policies can strengthen or dilute the effects of the central bank policy, he added.

Poor households would receive hundreds of pounds less in welfare benefits if the U.K. decided to leave the European Union, a leading economic think tank said Thursday.

The U.K. government will have to change tax and spending policies as a results of "Brexit", a research paper from the National Institute of Economic and Social Research said.

U.K. house prices are likely to log their first decline in four years in the months ahead as uncertainty mounts over the outcome of the referendum on the country's EU membership, survey results from the Royal Institution of Chartered Surveyors showed Thursday.

Simon Rubinsohn, chief economist at RICS, said a short-term dip in house prices is expected over the coming few months.

For the first time since 2012, a majority of members said prices are expected to fall over the next three months, RICS said.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 1.02 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.99 percent.

The DAX of Germany dropped 1.25 percent and the CAC 40 of France fell 0.97 percent. The FTSE 100 of the U.K. declined 1.10 percent and the SMI of Switzerland finished lower by 0.83 percent.

In Frankfurt, utility E.ON sank 6.98 percent after its shareholders approved the spinoff of Uniper.

Commerzbank fell 3.16 percent on reports it is considering hoarding billions of euros in cash in vaults, rather than paying a penalty charge for depositing it with the European Central Bank.

In Paris, Technip declined 3.57 percent and Total lost 1.21 percent.

Credit Agricole weakened by 2.31 percent and Societe Generale fell 2.10 percent. BNP Paribas also finished down by 1.14 percent.

In London, industrial group Essentra plunged 27.71 percent after warning about challenging market conditions.

Miner Glencore dropped 5.32 percent after agreeing to sell 9.99 percent stake in its agriculture business to a large Canadian pension fund.

Johnson Matthey lost 3.50 percent after going ex-dividend.

Vodafone Group surrendered 4.91 percent, after it reached an agreement to combine Vodafone New Zealand with Sky Network Television.

Pharmaceutical giant AstraZeneca decreased 1.97 percent after selling the marketing rights to a portfolio of anesthetics for up to $770 million. Merchandise retailer Home Retail Group dipped 0.19 percent after reporting a 2.6 percent rise in comparable sales growth in the 13 weeks to May 28.

Property developers were under pressure after the closely-watched RICS survey predicted a short-term drop in U.K. house prices in the coming months amid worries about Brexit and higher taxes on buy-to-let and second home purchases. Berkeley Group dropped 0.46 percent.

Utility and wind farm developer DONG Energy jumped in Copenhagen, after successfully completing its long-awaited initial public offering. The German trade surplus hit a monthly record in April despite a fall in exports to countries outside EU, data from Destatis showed Thursday.

Overall exports did not change from March after rising 1.9 percent. Economists had forecast a 0.9 percent drop for April.

Meanwhile, imports fell 0.2 percent on a monthly basis compared to March's 2.3 percent decline and a 1.2 percent rise economists had forecast.

Consequently, the trade surplus rose slightly to a record EUR 23.9 billion from EUR 23.7 billion in the previous month.

The U.K. visible trade deficit narrowed slightly in April, data from the Office for National Statistics showed Thursday. The deficit on trade in goods decreased to GBP 10.5 billion from GBP 10.6 billion in March. It was forecast to widen to GBP 11 billion.

The U.K. economy grew at a faster pace in three months to May, data from the National Institute of Economic and Social Research showed Wednesday. The think tank said the gross domestic product grew 0.5 percent in the three months to May, faster than the 0.4 percent expansion seen in three months to April.

The house price balance in the United Kingdom fell to 19 percent in May, the Royal Institution of Chartered Surveyors said on Thursday. That was well shy of forecasts for 35 percent and down sharply from 39 percent from the April reading.

China's inflation eased unexpectedly in May on food inflation and producer prices dropped at a slower pace, providing room for further stimulus to prop up growth, if needed.

The National Bureau of Statistics reported that consumer prices gained 2 percent in May from last year, while it was forecast to remain unchanged at 2.3 percent seen in April.

Another report from the NBS showed that producer prices dropped at a slower pace of 2.8 percent following a 3.4 percent decrease. Prices were expected to decline 3.2 percent. The PPI has been falling for more than four years.

The number of people filing first-time unemployment benefits unexpected dipped last week, according to new government statistics released on Thursday. The U.S. Labor Department revealed that initial jobless claims came in at 264,000 for the week ended June 4. This was down 4,000 from the previous week's revised level of 268,000.

Economists had expected the number to tick up slightly from the previous week. Experts were generally looking for a level around 270,000.

Wholesale inventories rose significantly more than expected in April, according to new government statistics released Thursday. A report from the U.S. Commerce Department showed that wholesale inventories advanced 0.6 percent in April after rising by a revised 0.2 percent in March.

Economists had expected inventories to rise by about 0.1 percent compared to the 0.1 percent advance originally reported for the previous month.