European stocks lower as China growth disappoints

On Monday European shares were negative after weaker-thanexpected growth data from China hit luxury stocks, while a persistent increase in commodity prices led to concerns about inflation getting out of control.

The pan-European STOXX 600 index dropped 0.5% after a positive start to the quarterly earnings season drove its best weekly performance since March on Friday.

Asian stocks were negative after data showed China’s economy reached its slowest pace of growth in a year in the third quarter, harmed by power shortages, supply chain bottlenecks and major wobbles in the property market.

China-exposed luxury stocks including LVMH, Kering and Hermes dropped about 3% respectively, also hurt by Chinese President Xi Jinping’s call for the expansion of a consumption tax.

Belgian materials technology and recycling group Umicore was among major laggards, dropping 5.5% after it cut its profit outlook to reflect a stronger than previously expected impact from the global semiconductor shortage.

Analysts are expecting European companies to report a near 47% increase in third-quarter profit, as per Refinitiv IBES data. Those figures have been revised higher in recent days, helping the STOXX 600 move toward its August peak.

European miners as well as oil and gas stocks were among the few gainers as crude futures moved past $85 a barrel and metal prices rallied.

The Hut Group gained 5.5% after the British online retailer backed by SoftBank said it would remove its founder’s “golden share” and seek a premium listing after its shares slumped last week.

French biotech company Valneva gained 32.3% after it reported positive results from a late-stage trial for its inactivated, adjuvanted COVID-19 vaccine candidate.

Oil prices extended a recent rally amid a global energy shortage with U.S. crude reaching a seven-year high and Brent a three-year peak.

Gold dropped 0.2% at $1,763 an ounce, after falling 1.5% on Friday as positive retail sales drove U.S. bond yields higher. This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.