EUROPE MARKETS: European Stocks Dragged To 3-week Low By Catalonia, China Concerns
October 19 2017 - 12:27PM
Dow Jones News
By Carla Mozee, MarketWatch
Publicis shares slide on revenue worries; Pernod pushed
higher
An escalation of political tensions in Spain, a clutch of
disappointing corporate updates and concerns about growth in China
prompted investors Thursday to yank European stocks to their lowest
close in nearly three weeks.
Where indexes finished: The Stoxx Europe 600 index fell 0.6% to
389.11, its lowest close since Sept. 29, according to FactSet data.
Consumer goods and services shares lost the most, but the
technology and utility sectors swung higher. The index on Wednesday
rose 0.3%
(http://www.marketwatch.com/story/dax-heads-for-new-record-as-euro-slide-helps-exporters-2017-10-18).
In Madrid, the IBEX 35 dropped 0.7% to end at 10,197.50, as the
Spanish government said it will move to suspend autonomous rule in
the Catalonia region
(http://www.marketwatch.com/story/standoff-in-spain-intensifies-as-government-gears-up-to-strip-autonomy-from-catalonia-2017-10-19),
after Catalan leaders failed to renounce their push for
independence. Among losing shares, Banco de Sabadell SA (SAB.MC)
fell 1.% and Bankia SA (BKIA.MC) gave up 0.8%.
Germany's DAX 30 index dumped 0.4% to close at 12,990.10,
pulling back from Wednesday's all-time closing high. France's CAC
40 moved 0.3% lower to 5,368.29, but pared a deeper decline.
In London, the FTSE 100 shed 0.3% to finish at 7,523.04.
Losses in European stocks accelerated during the session after
the Hang Seng Index slid 1.9%. Property stocks on that Hong Kong
benchmark came under pressure after housing sales by value
(http://www.marketwatch.com/story/china-september-housing-sales-contracts-2017-10-19)
in September decreased 2.4% from a year earlier. Data on Thursday
also showed China's economic growth slowed
(http://www.marketwatch.com/story/china-gdp-growth-slows-in-third-quarter-2017-10-18)
in the third quarter.
Read:Chinese central bank official Zhou warns of sudden collapse
in asset prices
(http://www.marketwatch.com/story/chinese-central-bank-official-zhou-warns-of-sudden-collapse-in-asset-prices-2017-10-19)
What strategists are saying:
"Spain has clearly had enough, invoking Article 155, which will
be activated at the weekend and will then proceed through its
various stages in the Madrid parliament," said Chris Beauchamp,
chief market analyst at IG. "The shock news jolted equities out of
their lazy drift higher, with a swift drop doubtless shaking a few
of the tardy newcomers out of their longs and giving bears
something to roar about, even if their moment was brief."
"Following [Chinese] data this morning and confirmation of
slowing credit growth this week, our medium-term lead indicators
remain firmly negative and we maintain our bearish sector view on
the mining equities," said analysts at Liberum.
The Stoxx Europe 600 Basic Resources Index managed to dig out of
the red, rising 0.1%.
Stock movers: Shares of Unilever (ULVR.LN) stumbled 5.5%, their
worst session since February, after the company behind brands
including Ben & Jerry's and Dove reported weaker revenue growth
of 2.6% in the third quarter. Analysts had been looking for growth
of 3.9%. Sales growth was hurt by poor weather in Europe and
natural disasters in the Americas, the consumer products company
said.
"There's really no growth in the U.S. business," Unilever Chief
Financial Officer Graeme Pitkethly said in an interview
(http://www.marketwatch.com/story/unilever-sales-disappoint-on-us-hurricane-impact-2017-10-19).
"But the big one-off impact that caused us to miss against
consensus this quarter were the hurricanes in Florida and
Texas."
Publicis Groupe SA (PUB.FR) sank 6.6% in Paris as the world's
third-largest advertising group posted third-quarter organic
revenue that fell short of analyst expectations
(http://www.marketwatch.com/story/publicis-shares-fall-5-on-disappointing-revenue-2017-10-19).
Pernod Ricard SA (RI.FR) gained 3.4% as first-quarter sales rose
2%, and the Absolut Vodka and Chivas Regal whisky maker confirmed
its profit target
(http://www.marketwatch.com/story/pernod-ricard-sales-rise-profit-target-confirmed-2017-10-19).
IWG PLC (IWG.LN) plunged 32%, after the workspace provider said
an anticipated improvement in third-quarter sales has been weaker
than expected.
BMW AG (BMW.XE) fell 0.9% following a downgrade to underweight
from equal weight at Morgan Stanley, which said a slump in U.S. and
U.K. demand and foreign-exchange headwinds were among risks facing
the auto maker, according to Dow Jones Newswires.
Travis Perkins PLC shares (TPK.LN) moved up 2.2% after the
building materials supplier said third-quarter comparable sales
rose
(http://www.marketwatch.com/story/travis-perkins-sales-up-business-on-track-2017-10-19)
and that it expects to meet its full-year expectations.
Economic data: U.K. retail sales fell month-over-month in
September by 0.8%
(http://www.marketwatch.com/story/uk-retail-sales-disappoint-with-drop-of-08-2017-10-19),
nearly erasing August's 0.9% rate of growth. Economists polled by
The Wall Street Journal predicted no change in the volume of
sales.
The pound eased against the euro . The shared currency fetched
89.81 pence compared with 89.26 pence late Wednesday. The euro,
meanwhile, recovered from losses logged against the dollar after
Spain said it's moving to suspend Catalonia's autonomy. It bought
$1.1845 versus $1.1787.
German businesses are upbeat about their future prospects
(http://www.marketwatch.com/story/german-businesses-upbeat-about-future-dihk-2017-10-19),
according to a survey published Thursday by business group DIHK
Chambers of Commerce between the end of August and early
October.
(END) Dow Jones Newswires
October 19, 2017 12:12 ET (16:12 GMT)
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