Euro­pean stocks fail to re­bound in worst week since Feb

The Financial Daily - - MARKET SUMMARY -

Euro­pean stocks failed to stage a re­cov­ery on Fri­day, post­ing their worst week since a mar­ket cor­rec­tion last Fe­bru­ary as a new sell- off hit bourses across the globe, amid wor­ries about pro­tec­tion­ism and fast-ris­ing U.S. in­ter­est rates.

Euro zone stocks ini­tially jumped one per­cent but rapidly shed all of their gains de­spite Wall Street open­ing higher.

All ma­jor bourses closed in neg­a­tive ter­ri­tory and the main re­gional in­dex .STOXXE ended the day down 0.2 per­cent and on a weekly loss of 4.8 per­cent.

That's just be­low the 5.1 per­cent fall back ex­pe­ri­enced last Fe­bru­ary when a sud­den scare about ris­ing in­fla­tion and in­ter­est rates caused a global mar­ket cor­rec­tion.

There's "a rot­ten trend" in Europe, a trader com­plained, not­ing that U.S. shares have out­per­formed their Euro­pean peers since the be­gin­ning of the year with the Trump ad­min­is­tra­tion's fis­cal cuts boost­ing earn­ings.

Europe lags far be­hind the United States in terms of earn­ings growth, and stronger re­sults will be crit­i­cal in lur­ing back some of the bil­lions that have been pulled out of Euro­pean stocks this year.

Third- quar­ter re­sults are be­gin­ning to trickle in from Euro­pean firms as Wall Street banks for­mally kicked off the earn­ings sea­son.

Tech stocks - the worst hit by this week's sud­den drop - made a mod­est come­back, up 0.5 per­cent, along with the growth- sen­si­tive autos .SXAP sec­tor.

Dutch biotech Ar­genx (ARGX.BR) rose 5.7 per­cent af­ter a pos­i­tive note from bro­ker Piper Jaf­fray.

Gucci owner Ker­ing (PRTP.PA) was up two per­cent. The re­cov­ery comes af­ter in­vestors sold the sec­tor ear­lier this week due to its big ex­po­sure to Chi­nese con­sumers amid fears about slow­ing growth in the world's sec­ond big­gest econ­omy.

"The re­cent de­r­at­ing ap­pears over­done," wrote Credit Suisse an­a­lysts. "We see a re­peat of the 2013-15 sce­nario as un­likely... The lux­ury sec­tor has be­come less re­liant on China to grow."

Bro­ker notes also moved some stocks.

On­line re­tailer Za­lando (ZALG.DE) gained 2.6 per­cent and Asos (ASOS.L) rose 4 per­cent af­ter Credit Suisse an­a­lysts said they were con­fi­dent that in Europe re­tail brands pre­ferred the two firms' plat­forms to Ama­zon (AMZN.O).

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