EUROPE MARKETS: European Stocks Log Worst Session In 2 1/2 -years On Slumping Oil Prices, Huawei Fallout
December 06 2018 - 3:44PM
Dow Jones News
By Anneken Tappe, MarketWatch , Emily Horton
Germany's Dax enters bear market
European stocks ended sharply lower on Thursday, marking their
worst one-day performance since June 2016, amid slumping oil
prices, concerns about global economic growth and the arrest of a
high-profile Huawei executive aggravating the resurfaced U.S.-China
trade-war fears.
Banking, oil and technology stocks led the decliners.
What are markets doing?
The Stoxx Europe 600 closed down 3.1% at 343.31, having logged
its largest one-day point and percentage decline since June 27,
2016, according to Dow Jones Market Data. The stock index ended
down 1.2% on Wednesday.
Germany's DAX 30 closed 3.5% lower at 389.26. The benchmark hit
a fresh 52-week low and was off 20.3% from its most recent peak in
January, meeting the widely used definition for a bear market.
France's CAC 40 closed 3.3% lower at 163.91, and the U.K.'s FTSE
100 finished off 3.2% at 6,704.05.
Italy's FTSE MIB Italy index fell 3.5% to end at 18,643.83.
The euro was stronger versus the U.S. dollar, last fetching
$1.1385, up from $1.1344 late Thursday in New York.The British
pound was up $1.2786, up from $1.2735.
Read:Theresa May absorbed three sharp blows Tuesday as steward
of U.K.'s Brexit process
(http://www.marketwatch.com/story/what-mays-losses-in-parliament-and-the-european-courts-vote-mean-for-brexit-2018-12-04)
What is driving the market?
Global stocks suffered on Thursday after the arrest of Meng
Wanzhou
(http://www.marketwatch.com/story/huawei-cfo-arrested-in-canada-at-us-request-for-allegedly-breaking-iran-sanctions-2018-12-05),
chief financial officer of Chinese telecom giant Huawei
Technologies, in Canada by request of the U.S. over violating Iran
sanctions. Chinese authorities in turn demanded her release
(http://www.marketwatch.com/story/china-demands-release-of-huawei-executive-company-denies-any-wrongdoing-2018-12-06).
The arrest hurt risk appetite across financial markets, as
investors worried about the likelihood of the U.S. and China
resolving their trade conflict amid the news.
Elsewhere, a two-day OPEC meeting kicked off, and oil prices
sunk amid no signs of a deal to cut production
(http://www.marketwatch.com/story/oil-prices-sink-as-saudi-official-signals-no-pact-yet-at-key-opec-gathering-2018-12-06)
during the European trading day. After hours, OPEC agreed a
preliminary pact to cut output.
In Europe, Italy was due to make the final cost analysis of its
scandal-ridden budget. Deputy Prime Minister Luigi di Maio said
Thursday that the main budget items will cost less than expected
and that Brussels cared most about curbing Italy's debt burden,
according to Reuters
(https://www.reuters.com/article/us-italy-budget-debt/italys-di-maio-says-main-budget-items-to-cost-less-than-expected-idUSKBN1O526C).
The European Commission sent Rome back to the drawing board when
it was first submitted, after the government spending was deemed as
too high and potentially in violation of the European Stability and
Growth Pact.
What stocks are active?
Heavyweight banking stocks were among the biggest losers on
Thursday, with HSBC Holdings PLC (HSBA.LN) (HSBA.LN) was down 3.6%
at the close. Lloyds Banking Group PLC (LLOY.LN) finished 2.7%
lower.
Tech stocks fell sharply, with Capgemini SE (CAP.FR) finished
6.4% lower.
Among resource stocks, steelmaker ArcelorMittal (MT) finished
5.9% lower, and oil stocks were under pressure. Total SA (TOT)
ended the session down by 2.9%, BP PLC (BP.LN)(BP.LN) closed 4.5%
lower and Royal Dutch Shell PLC (RDSA.LN) finished with a 4.5%
loss.
(END) Dow Jones Newswires
December 06, 2018 15:29 ET (20:29 GMT)
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