European markets make a cautious start to August trading; HSBC is up 6%.

LONDON – European stock prices fell on Monday to start the new month, as investors digested a fresh round of corporate earnings.

The pan-European Stoxx 600 index partially hovered above the flat line by mid-morning, as banks added 1.9% while construction and materials stocks fell 0.4%.

The mixed trade for European stocks comes after the region’s markets closed July higher on Friday, posting their best month since November 2020.

Investors digested a fresh batch of corporate earnings and key economic data from the euro zone last week, as data released last Friday showed the euro zone’s economic growth accelerated in the second quarter, despite the mounting gas crisis and record inflation.

The 19-nation bloc posted a 0.7% increase in gross domestic product, beating expectations for 0.2% growth and sharply contrasting negative annual readings from the US in the first and second quarters.

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Elsewhere overnight, US stock futures slipped after Wall Street’s best month since 2020 as investors look ahead to another week of key earnings reports and economic data, particularly Friday’s non-farm payrolls report from the Bureau of Labor Statistics, which will give More insight into the workforce. Market.

So far this year, strong job growth has led economists to say the US is not currently in a recession, even with two consecutive quarters of negative GDP.

In the Asia-Pacific markets, mainland China shares rose along with most other regional indices on Monday as a special survey of Chinese factory activity showed slight growth.

Monday’s earnings came from HSBC, Pearson, Heineken and Erste Group.

Pearson shares jumped more than 6.6% in early trading to top the Stoxx 600 after the British education and publishing company reported strong quarterly results, while HSBC rose 6% after it raised its key profitability target.

At the bottom of the European index, Swedish property company SBB fell 6.2% after Goldman Sachs cut the rating from “neutral” to “sell”.

On the data front, eurozone manufacturing activity contracted in July, as revealed by S&P Global’s final manufacturing PMI on Monday, deepening fears the bloc is sliding into recession.

CNBC’s Carmen Renick and Abigail Ng contributed to this market report.

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