Euro­pean shares drop as China data dent op­ti­mism

The Pak Banker - - MARKETS/SPORTS -

Euro­pean stocks de­clined as dis­ap­point­ing Chi­nese data dented in­vestor en­thu­si­asm af­ter last week's re­bound trimmed the worst Jan­uary loss since 2008.

The Stoxx Europe 600 In­dex slipped 0.5 per­cent to 340.64 at 10:02 a.m. in Lon­don. Amid a volatile start to the year, the equity gauge pared its Jan­uary loss to 6.4 per­cent, as stim­u­lus from the Bank of Ja­pan and in­di­ca­tions that the Euro­pean Cen­tral Bank may re­con­sider its pol­icy stance in March eased some con­cerns about the im­pact of China's slow­down and an oil rout on global growth.

"In­vestors are get­ting con­flict­ing sig­nals about global growth," said Daniel Mur­ray, Lon­don-based head of re­search at EFG As­set Man­age­ment. "It's all very con­fus­ing and it's mak­ing peo­ple ner­vous. Even the small­est macro event or data point can tip sen­ti­ment ei­ther way."

China's of­fi­cial fac­tory gauge dropped to a three-year low in Jan­uary, miss­ing fore­casts and sig­nal­ing a record sixth straight month of de­te­ri­o­ra­tion. The of­fi­cial ser­vices in­dex also fell.

All Stoxx 600 in­dus­try groups lost ground in Jan­uary, with banks, min­ers and auto com­pa­nies the hard­est hit. Among na­tional bench­marks, Italy's FTSE MIB posted the big­gest drop, los­ing 13 per­cent. Ger­many's ex­port-heavy DAX In­dex slid 8.8 per­cent for its largest monthly de­cline since Au­gust. "It's com­mon to get a bounce when mar­kets fall this far this quickly, but oc­ca­sion­ally you get a rollover, and that's the chal­lenge now," said Mur­ray. "The longer this cy­cle goes on, the closer you get to the next re­ces­sion."

Nokia Oyj dragged a gauge of tech­nol­ogy stocks to big­gest de­cline of the 19 in­dus­try groups on the Stoxx 600, tum­bling 10 per­cent af­ter in­vestors were dis- ap­pointed by a court de­ci­sion in a pa­tent dis­pute with Sam­sung Elec­tron­ics Co. Al­ca­tel-Lu­cent SA slid 11 per­cent.

En­ergy-re­lated shares were also among the worst per­form­ers as the price of oil slid, with ser­vice provider Sead­rill Ltd. lead­ing de­clines.

Lux­ot­tica Group SpA fell 8.5 per­cent af­ter quar­terly sales missed an­a­lysts' pro­jec­tions. The maker of Ray-Ban eye­glasses also said its co-Chief Ex­ec­u­tive Of­fi­cer re­signed.

Ryanair Hold­ings Plc led a mea­sure of travel and leisure com­pa­nies to the best per­for­mance on the Stoxx 600, gain­ing 3.1 per­cent af­ter fore­cast­ing fourth-quar­ter traf­fic will grow more than pre­vi­ously ex­pected and say­ing it will re­turn 800 mil­lion euros ($868 mil­lion) to in­vestors via a share-buy­back pro­gram. BT Group Plc pushed telecom­mu­ni­ca­tions com­pa­nies higher, ris­ing 3.1 per­cent af­ter quar­terly profit beat es­ti­mates.

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