EUROPE MARKETS: European Stocks Head To 3-week Low, Hit By Cocktail Of Worries Over Catalonia, China
October 19 2017 - 8:33AM
Dow Jones News
By Carla Mozee, MarketWatch
Publicis shares under pressure over sales concerns
An escalation of political tensions in Spain, a clutch of
disappointing corporate updates and concerns about growth in China
prompted investors to yank European stocks down toward a three-week
low on Thursday.
Where indexes are trading: The Stoxx Europe 600 index fell 0.9%
to 387.99, on track for its lowest close since Sept. 28, according
to FactSet data. No sector traded higher, and consumer goods and
services shares were down the most. 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 0.9% to 10,185.30 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 1.6% and Bankia SA (BKIA.MC) gave up 0.5%.
Germany's DAX 30 index dumped 0.8% to 12,938.82, pulling back
from Wednesday's all-time closing high. France's CAC 40 moved 0.7%
lower to 5,348.45.
In London, the FTSE 100 lost 0.5% at 7,504.45, after finishing
Wednesday's session not far from the record close logged last
week.
Losses in European stocks accelerated 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.
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 was 0.8% lower.
Stock movers: Shares of Unilever (ULVR.LN) stumbled 4.3% 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 7.4% 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).
IWG PLC (IWG.LN) plunged 34%, after the workspace provider said
an anticipated improvement in third-quarter sales has been weaker
than expected.
Travis Perkins PLC shares (TPK.LN) were up 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, more than 89.26 late Wednesday. The euro, meanwhile,
recovered from losses logged against the dollar after Spain said
it's moving to suspended Catalonia's autonomy. It bought $1.1833
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 08:18 ET (12:18 GMT)
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