EUROPE MARKETS: European Stocks Extend Declines As Global Service Sector Slows; Airbus Climbs
October 03 2019 - 10:29AM
Dow Jones News
By Steve Goldstein, MarketWatch
Remy Cointreau shares rally as cognac is to be excluded from new
tariffs
European stocks on Thursday turned lower, as a disappointing
reading on the U.S. service sector reignited worries about the
global economy.
After suffering its worst single-day loss in nearly 11 months on
Wednesday, the Stoxx Europe 600 fell further, losing 0.8% to
374.87. Banks and energy producers paced the decline.
The French CAC 40 slipped 0.4% to 5398.55 while the U.K. FTSE
100 fell 1.6% to 7007.62.
The German market was closed for a holiday.
The Institute for Supply Management reported its worst
non-manufacturing index in three years, with a reading of 51.8%.
The final reading of eurozone services PMI for September was
revised lower to 51.6 from the initial 52 reading, and U.K.
services PMI fell into contraction territory as it fell to 49.5
from 50.6.
The bad data comes on top of news the U.S. will introduce fresh
tariffs on $7.5 billion of European Union goods following a World
Trade Organization victory.
"With markets already looking vulnerable over concerns about a
manufacturing recession starting to bleed into a slowdown in the
services sector, the timing of the WTO ruling could not have come
at a worse time for already jittery investors, along with the U.S.
response to apply tariffs to a wide range of goods including malt
whisky, French wines, and a range of food items, from October
18th," said Michael Hewson, chief market analysts at CMC Markets
UK.
Analysts at Jefferies said the new tariffs actually weren't as
bad as it feared for European alcoholic beverage makers. Remy
Cointreau (RCO.FR) shares jumped 5% and Pernod Ricard (RI.FR) rose
3.2%, as cognac, champagne and liqueurs from France were excluded
from the tariff list. Diageo (DGE.LN) and Campari (CPR.MI) shares
also rose.
Airbus (AIR.FR) was another gainer, rising 3.3%, as parts made
by one of its plants in Alabama will not be subject to new
sanctions. Analysts at Bank of America Merrill Lynch said investors
had feared 100% tariff rates instead of the 10% the U.S. government
will levy.
H&M (HM-B.SK) shares jumped 7% as the retail chain reported
a stronger-than-forecast profit.
(END) Dow Jones Newswires
October 03, 2019 10:14 ET (14:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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