European stocks retreated on Friday as Amazon reported disappointing earnings and fresh losses in Chinese markets stirred debates about China’s policy risks.

Meanwhile, the euro area economy recovered in the second quarter, the preliminary flash estimate published by Eurostat showed.

Gross domestic product expanded 2 percent sequentially, reversing the 0.3 percent drop posted in the preceding period. The growth rate was bigger than the expected 1.5 percent.

On a yearly basis, GDP rebounded 13.7 percent after shrinking 1.3 percent in the first quarter. GDP was forecast to grow 13.2 percent.

Eurozone inflation accelerated more-than-expected in July, largely driven by higher energy prices, flash data from Eurostat showed.

Inflation rose to 2.2 percent in July from 1.9 percent in June. The rate was above the expected 2 percent.

The pan European Stoxx 600 dropped 0.6 percent to 461.01 after rising half a percent on Thursday. The German DAX lost about 1 percent, France’s CAC 40 index slipped 0.3 percent and the U.K.’s FTSE 100 was down 1 percent.

Italian lender UniCredit jumped 4.1 percent after posting higher-than-expected net profit.

Miners Anglo American, Antofagasta and Glencore declined 2-3 percent amid mounting concerns about harsh regulation on a range of private companies in China.

NatWest Group lost 1.7 percent even as the bank returned to profit and announced plans for a fresh round of dividends and share buybacks.

Publishing company Pearson rallied 3.5 percent. The company raised its interim dividend after reporting improved sales across all arms of its business in its latest half-year.

Intertek slumped 7.2 percent despite the assurance and product testing group reporting a rise in first-half profits.

British Airways-owner IAG lost 6.3 percent after it plunged to a €2bn (£1.7bn) half year loss.

BNP Paribas edged down 0.6 percent. The French lender reported a 26 percent rise in net income in the second quarter and said it will pay shareholders an additional dividend.

Automaker Renault declined 2.2 percent. The company said the supply chain issue and rising raw material prices could curb further recovery in profitability this year.
Luxury glasses maker EssilorLuxottica jumped 3.7 percent after raising its full-year guidance.

Airline Air France gave up 1.1 percent despite narrowing its loss for the second quarter.

German electric power distribution company RWE rose 0.6 percent after raising its FY21 earnings forecast on strong trading business.

Healthcare company Fresenius tumbled 4.6 percent despite posting better-than-expected second-quarter results and raising its 2021 earnings guidance.

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