Stoxx 600, central bank decisions, UK retail sales

LONDON — European stocks closed lower Friday as investors assessed a slew of central bank decisions and data releases.

The pan-European Stoxx 600 index ended the session down 0.69%, with bank stocks tumbling 1.5% as utilities managed a 0.1% gain.

Carlsberg shares fell 9% after U.K. soft drinks maker Britvic confirmed it had rejected two unsolicited takeover proposals from the Danish drinks giant, saying the latest offer of 1,250 pence per share “significantly undervalues” the company. Britvic shares jumped 9% following the announcement.

Equity markets had largely shaken off last week’s negativity after populist, far-right parties made strong gains in elections to the European Union Parliament. Even France’s CAC 40 index saw a weekly gain after being hammered by the country’s shock election announcement, though the euro remains on the back foot as investors brace themselves for a potential far-right victory in the euro zone’s second-largest economy.

Options volatility suggests traders see more risk of big currency movements stemming from France than they do for the British pound as a result of the U.K.’s own upcoming election, according to Reuters.

Attention this week turned to central bank action, as the Swiss National Bank announced it would cut interest rates by 0.25 percentage points to 1.25%. The SNB became the first major central bank to cut rates during this cycle back in March.

The Bank of England meanwhile kept interest rates unchanged at a 16-year high of 5.25%. Economists largely detected a dovish undertone to policymakers’ latest messaging, as they described a “finely balanced” decision not to cut, though by Friday money market bets on an August rate cut had fallen back down to around 40%. Norway’s central bank also held rates on Thursday.

Data released Friday showed British retail sales volumes rose 2.9% in May, well ahead of expectations for a 1.5% increase and rebounding from a dour April performance when shoppers were deterred by wet weather.

“After a slow start to the year, retailers can take comfort in retail sales recovering just in time for summer — a time when major sporting events, from the EUROs to the Olympics, will also likely improve the trading environment,” Deann Evans, EMEA managing director at Shopify, said.

Other releases Friday included French business confidence, which held steady for a third straight month, and German and British flash purchasing managers’ index figures, which broadly showed a slowdown in the recent uptick in business activity.

Asia-Pacific markets closed lower Friday after Japan’s May core inflation data came in slightly cooler than expected. U.S. stocks were slightly lower on Friday morning on Wall Street. Trading in the U.S. was expected to more volatile than normal due to triple witching, the expiration of stock options, stock index options and stock index futures options.