European stocks close lower on Turkey concerns; banks fall; Novozymes down 3%

European stocks closed lower on Friday as investors reacted to corporate earnings, fresh turmoil in Turkey and the ongoing trade war between the U.S. and China.

The pan-European Stoxx 600 ended trade just over 1 percent below the flat line. Several sectors including banks and basic resources finished the week nearly 2 percent lower.

Negative trade came as the euro dropped sharply against the dollar, following reports that the European Central Bank (ECB) is concerned over the impact of a weak Turkish lira on European lenders.

TheFinancial Times said that France’s BNP Paribas, Italy’s UniCredit and Spain’s BBVA could be particularly impacted by the ongoing depreciation of the lira. Most banking stocks ended the session in the red.

On the earnings front, Novozymes’ stock underperformed throughout the day, closing 3.3 percent to the downside. The biotech firm’s second-quarter results missed expectations.

Meanwhile, budget carrier Ryanair is facing flight cancellations across Europe as pilots strike in Ireland, Germany, Belgium, Sweden, and the Netherlands. Shares ended trade 4.2 percent lower.

Elsewhere, Sports Direct has bought all the U.K. stores, stock and brand of House of Fraser. The deal cost $115 million. Shares of Sports Direct fell slightly on the news.

In the U.S., stocks fell on Friday as geopolitical concerns pushed the Turkish lira to a record low against the dollar.

The Dow Jones Industrial Average dropped 138 points as Intel declined. The S&P 500 fell 0.4 percent as financials lagged. The Nasdaq Composite also pulled back 0.4 percent.

Traders have remained on edge after China matched the most recent round of U.S. tariffs with 25 percent levies of its own, targeting $16 billion worth of American goods.

Gross domestic product (GDP) figures out Friday morning showed the U.K. economy growing 0.4 percent in the second-quarter of the year.

Source: CNBC

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Egypt’s PM stresses coordination for economic stability

Egypt’s Prime Minister Moustafa Madbouly retirated on Wednesday the need for ongoing coordination between the Central Bank of Egypt (CBE) and the Ministry of Finance to enhance economic stability as per presidential directives.

During his weekly meeting, Prime Minister Madbouly assured that the government is dedicated to taking essential steps to enhance economic stability. Focus areas include controlling inflation and supporting the private sector for economic growth.

The goal is to enhance the investment environment and boost private sector involvement in the economy. The government is working to create a stable economic climate that attracts both domestic and foreign investment.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser

Italy approves 2025 budget, aims to cut deficit

Italy’s parliament approved the budget for 2025 on Saturday, delivering a victory for Prime Minister Giorgia Meloni just before the year-end deadline.

The Senate passed the budget with 112 votes in favour, cementing plans to reduce the country’s deficit to 3.3 per cent of GDP next year and below the EU’s 3 per cent ceiling by 2026.

The budget includes tax cuts aimed at middle- and low-income earners and retains a 26 per cent tax on cryptocurrencies, set to rise to 33 per cent in 2026.

While public debt is expected to climb due to lingering costs from state construction subsidies, Italy’s economic growth is projected at 0.5 per cent for 2024 and 0.8 per cent for 2025.

Markets have responded positively, with the spread between Italian and German 10-year bonds at a three-year low. Lower borrowing costs are also expected to save the government €1.7 billion ($1.8 billion) next year.

Attribution: Bloomberg

Subediting: Y.Yasser

China revises ’23 GDP growth upwards

China revised its 2023 gross domestic product (GDP) upwards by 2.7 per cent, increasing the economy’s size by 3.4 trillion yuan to 129.4 trillion ($17.73 trillion), according to the National Bureau of Statistics.

Despite the adjustment, officials stated the revision would have minimal impact on 2024 growth rates.

The update comes amid plans for increased fiscal and monetary stimulus to achieve a growth target of “around 5 per cent” next year, as China faces challenges such as subdued domestic confidence and US trade tensions.

The revision aligns with the country’s fifth national economic census, covering the pandemic years, and will aid in crafting China’s 15th five-year plan (2026-2030).

President Xi Jinping’s goal of doubling the economy by 2035 requires an annual growth rate of 4.7 per cent, a figure analysts view as ambitious.

Meanwhile, census data revealed significant growth of 25.6 per cent in tertiary industries employment but a sharp 27 per cent decline in property developer jobs, reflecting the ongoing property sector crisis.

Attribution: Reuters

Subediting: M. S. Salama

PM: Egypt’s govt. believes in critical role of private sector

The Prime Minister met with a group of investors from various sectors on Wednesday evening to discuss the challenges currently facing the private sector and explore potential solutions for advancing across multiple sectors. The meeting aimed to foster collaboration between the government and the private sector in overcoming obstacles and driving growth in the coming years, according to a Cabinet statement.

The Prime Minister reaffirmed the government’s strong belief in the critical role of the private sector as the engine of Egypt’s development. He highlighted that private sector investments accounted for the largest share of total public investments, underscoring their importance to the nation’s economic growth. However, he acknowledged that since 2011, the private sector’s role has naturally diminished due to the instability affecting Egypt. This uncertainty has led to a more cautious approach from investors, who have been hesitant to expand their investments. As a result, the government was compelled to increase its own public investments during certain periods to support the economy.

The Prime Minister emphasised that despite these challenges the private sector remains Egypt’s largest source of job creation, with its contributions to GDP being the most significant. Through experience, the state has come to believe that the private sector is best suited for management and operation, owing to its extensive expertise in these areas.

The discussions ultimately reinforced the government’s commitment to revitalising the sector’s role in Egypt’s development. Efforts will focus on creating a more supportive environment for investment, ensuring sustainable growth and long-term economic progress.

Attribution: Amwal Al Ghad English

Subediting: M. S. Salama

CIS GDP to surpass global average – Putin

The total GDP of Commonwealth of Independent States (CIS) countries is projected to grow by 4.7 per cent in 2024, exceeding the global average, Russian President Vladimir Putin announced at the informal CIS summit.

Putin highlighted improved macroeconomic indicators across the bloc, with industrial production up 4.3 per cent, cargo transport rising 7.4 per cent, and retail sales increasing 7.7 per cent in the first 10 months of 2024.

As CIS chair, Russia focused on deepening economic integration, eliminating trade barriers, and simplifying customs procedures, Putin added, underscoring efforts to enhance the bloc’s global standing.

Attribution: TASS

Subediting: M. S. Salama