Europe close: Shares lower despite US jobless data as UK numbers hit sentiment

(Sharecast News) - European shares closed lower on Thursday, despite better-than-expected US jobless data, as UK government borrowing numbers and weak retail sales figures hit sentiment.

The pan-European Stoxx 600 index was down 0.21% at 476.94 with all major bourses lower. Investors and traders are looking ahead to the personal consumption expenditures price index reading on Friday - a closely followed gauge of inflation - along with UK GDP and retail sales numbers.

In economic news, the US economy grew less than previously estimated in the third quarter, according to figures released on Thursday by the Commerce Department.

GDP for July to September was revised down to 4.9% from 5.2% in the second estimate. Economists were expecting growth to be unrevised.

Meanwhile, the number of Americans filing new claims for unemployment benefits rose just marginally last week, hinting at a strengthening economy. Initial claims for state unemployment benefits increased 2,000 to a seasonally adjusted 205,000 for the week ended December 16th, the US Labor Department said. Economists had forecast 215,000 claims for the latest week.

IG analyst Axel Rudolph said the still-strong strong US GDP expansion, initial jobless claims rapidly falling US Treasury yields gave US stock indices another boost.

"While they are back trading close to their recent record highs, european equity indices see a session in the red. Worse than expected UK retail sales put a dampener on the FTSE 100's advance after three straight days of gains," he said.

In Britain, official figures showed government borrowing excluding public sector banks came in at £14.3bn. This was below November 2022's £15.2bn but above consensus forecasts of £13bn. It also marked the fourth highest November borrowing since monthly records began in 1993.

Debt interest payments for November surpassed all monthly November figures on record since 1997, coming in at £7.7bn.

Investors were also mulling the latest Distributive Trades Survey from the Confederation of British Industry, which showed the downturn in the retail sector deepened in December following a disappointing festive period.

The CBI's retail sales balance fell to -32 from -11 in the year to November. This marked the eighth consecutive monthly decline.

On a day thin on any major corporate news, Vodafone shares made small gains on a report that Swisscom is weighing a possible offer for the telecom operator's Italian business next year.

Reporting by Frank Prenesti for Sharecast.com