EUROPEAN stocks settled lower on Tuesday, as a lack of fresh details over China’s stimulus measures sparked a selloff in sectors linked to the world’s second-largest economy such as mining and luxury.
The pan-European Stoxx 600 index dropped around 1 per cent to touch a two-week low, before paring losses and declining 0.55 per cent.
Luxury firms such as LVMH, Kering, Burberry and Hermes, which draw a large part of their revenue from China, fell in the range of 0.6 per cent to 4.5 per cent.
Miners fell the most among European sectors, down 4.4 per cent, as copper and iron ore prices dropped after Chinese officials failed to inspire confidence in stimulus plans intended to revive the economy.
Shares of spirits makers Remy Cointreau and Pernod Ricard dropped 6.4 per cent and 4.2 per cent, respectively, as China announced provisional anti-dumping measures on brandy imports from the European Union.
Luxury stocks and spirit makers weighed on France’s stock index that underperformed the benchmark Stoxx and other markets in the currency union.
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“The market can live with some additional tariffs here and there, but it can get escalated if they impose dramatic tariffs more quickly to really turn the screws,” said Chris Beauchamp, chief market analyst at IG Group.
“Negotiations are going around cars and engine makers at the moment and are probably the key ones to watch.”
A nearly 5 per cent slide in crude prices hurt energy-focused bourses in the UK and Norway that dropped over 1.3 per cent each.
On the data front, German industrial production rose by a larger-than-expected 2.9 per cent in August but did little to lift market sentiment, with traders focused on a gloomy picture of the euro-zone economy.
Still, the Stoxx index, along with German, Italian and Spanish stocks are on track for annual gains, as investors priced in interest-rate cuts by the European Central Bank.
Economists polled by Reuters expect the ECB to cut its deposit rate by 25 basis points next week and again in December.
Investors also geared up for third-quarter corporate results, with data compiled by LSEG forecasting a 4.6 per cent increase from a year ago.
Among other stock movers, Vistry plunged 24.3 per cent after the British homebuilder cut its fiscal 2024 profit outlook, hurt by increased build costs in one of its divisions.
Imperial Brands rose 4 per cent after the maker of Winston cigarettes forecast a growth of 20 per cent to 30 per cent in fiscal 2024 revenue from next-generation products and announced shareholder returns of £2.8 billion (S$4.8 billion). REUTERS
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Publish date : 2024-10-08 15:18:00
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