UPDATE 2-European stocks suffer monthly decline as growth worries come to fore

Reuters

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    * Tech stocks among the few gainers as Nokia surges 
    * STOXX 600 breaks monthly winning run 
    * European mood sours after weak Wall Street open

 (Updates to market close)
    By Sruthi Shankar
    July 31 (Reuters) - European stocks posted their first
monthly decline since a market selloff in March on Friday as
growing doubts over a global recovery from the coronavirus
crisis overshadowed a batch of strong earnings from technology
firms.
    The pan-European STOXX 600 index  .STOXX  gave up early
gains to close 0.9% lower, pressured by a weak open for Wall
Street as optimism from stellar earnings reports from big tech
names Amazon  AMZN.O , Apple  AAPL.O  and Facebook  FB.O  faded.
 .N 
    An early reading of the euro zone's economy showed the bloc
shrank by a bigger-than-expected 12.1% in the second quarter,
its deepest contraction on record as lockdowns ravaged business
activity. urn:newsml:reuters.com:*:nL5N2F234K
    Spain's benchmark index  .IBEX  dropped 1.7% as the country
posted the worst output slump, while GDP in Italy and France
also fell sharply but less than forecast.
    "Lockdown exits coupled with massive stimulus brought a
strong rebound in activity during Q2, which supported the rally
in equities, but recovery appears to be levelling off," equity
strategists at Barclays wrote in a note.
    "Overall, choppy markets could continue due to elevated
uncertainty, low conviction and tight summer liquidity."
    The STOXX 600 was down about 1% in July, with fears of a
resurgence in COVID-19 cases also weighing on the mood as
Britain imposed a tougher lockdown in swathes of northern
England, while Spain saw a surge in new infections. 
 urn:newsml:reuters.com:*:nL5N2F126S  urn:newsml:reuters.com:*:nE8N2BG011
    Technology stocks  .SX8P  were among the few gainers, up
0.7% after forecast-beating results from Wall Street's tech
majors on Thursday.  urn:newsml:reuters.com:*:nL3N2F1551
    The top gainer on the STOXX 600 was Finnish telecom network
equipment maker Nokia  NOKIA.HE , up 12.5% after reporting an
unexpected rise in underlying profit as it reduced low-margin
business.  urn:newsml:reuters.com:*:nL5N2F21SL
    "The strength of numbers from the 'four horsemen of tech' is
leading to a halo effect for the tech sector and a resumption of
growth stocks leading the market," said Neil Campling, head of
TMT research at Mirabaud Securities.
    "Nokia results also help sentiment as the key for the
equipment stocks is always on margins to get a sense of
pricing." 
    BNP Paribas  BNPP.PA  rose 0.8% as it earned a
higher-than-expected quarterly profit, boosted by a surge in
fixed income trading and strong demand for corporate finance.
 urn:newsml:reuters.com:*:nL5N2F20Q3
    Nearly 50% of the companies listed on the STOXX 600 have
reported quarterly earnings so far, and 64% of those have
surpassed beaten-down profit expectations, according to
Refinitiv data.

 (Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb
Chakrabarty and Kirsten Donovan)
 ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6182 2787;))

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