Sunday , 22 May 2022
Home / Market / European shares knocked back by weak mining and financial stocks

European shares knocked back by weak mining and financial stocks

London (Benchmark News) – European shares fell on Thursday as underwhelming Chinese trade data knocked down mining stocks while Standard Life and Aegon slid on broker downgrades

The pan-European STOXX 600 index fell more than 1 percent to a two-month low, with the index down by around 8 percent so far in 2016. All major sub-sectors were lower on Thursday.

Standard Life fell 4.6 percent after Barclays cut the stock to “underweight” while insurer Aegon fell more than 5 percent after Societe Generale cut it to a “hold” on worries over variable annuities in the United States.

Dutch navigation firm TomTom fell 6.6 percent after it said sales of its personal navigation devices had been weaker than expected in the third quarter.

Mining stocks such as BHP Billiton and Rio Tinto took a hit after gloomy trade data from China, which is the world’s biggest consumer of metals.

“A 10 percent fall in Chinese exports in September not only provides a warning signal that the world’s second largest economy is losing momentum, but also suggests a fragile global demand,” said FXTM chief market strategist Hussein Sayed.

U.S. bank Citigroup also cut its rating on BHP Billiton and Rio Tinto to “sell” from “neutral”.

Shares in Unilever and Tesco also fell, with the two companies locked in a row over pricing sparked by a plunge in sterling caused by Britain’s shock vote in June to quit the European Union.

Sterling has shed 18 percent against the U.S. dollar since the “Brexit” vote.

After a brief period of stability, the sell-off has worsened again in the past two weeks on a series of signs that the government would prioritise controls on immigration over access to the European single market.

“A weaker pound can only mean higher prices for consumers or lower margins for suppliers and retailers, or a combination of all of these,” said ETX Capital markets analyst Neil Wilson.

“Supermarkets are afraid to raise prices and the Tesco-Unilever tussle is a symptom of a bitter sector price war that is crimping margins,” added Wilson.

Check Also

The Price Of Gold Down The Response Of The Fed’s Stance.

Benchmarknews, New York-gold prices down on Thursday (21/9/2017), settled below US $1,300 for the first time in September afterthe Federal Reserve hinted that U.S. interest rates will rise in …

Leave a Reply

Your email address will not be published.