European equities hit hard by China’s regulatory shake-up and US policy
Falling commodity prices, regulatory upheavals in China and signs that the United States may ease economic stimulus hit European stocks hard on Thursday. Philip Byrne, deputy director of investments at Cantor Fitzgerald Ireland, blamed the developments in China and Europe.
He noted that the signal from the US Federal Reserve that it may start to reduce the economic stimulus was not surprising.
“People think the tapering will start in November and December, at the margin, it’s probably not as aggressive as it could have been,” he said.
Mr Byrne said people were concerned about the impact of the Delta variant on China, where the government has imposed travel restrictions.
At the same time, it announced cuts in steel production, a further rebalancing of its economy, and measures to regulate the country’s luxury goods and tech companies. “These factors combined have really taken a toll on Europe,” Byrne noted.
Ryanair slipped 3.2% to € 15.73, airlines having suffered some of the fallout. Dealers said it was down 2% for most of the day before being sold “more aggressively” in subsequent exchanges.
Group of building materials CRH lost 1.49%, in line with the market, to close at € 43.54. Owner of Paddy Power, Flutter Entertainment, fell 2% to € 159.20, ending a strong run triggered by good interim results last week.
Insulation specialist Kingspan fell 1.96% to € 93.84. Its shares recently hit new highs as it is due to release interim figures on Friday.
Bank of Ireland closed down 1.59% at € 5.062. AIB edged up 0.4% to € 2.40 while Permanent BST added 0.75% to € 1.35.
The Iseq as a whole finished down 1.4 percent.
London’s FTSE 100 ended sharply lower on Thursday as heavy mining and energy stocks followed a fall in commodity prices on signs of slowing demand and economic growth amid fears of a further pullback rapid global monetary stimulus.
The blue-chip FTSE 100 index fell 1.5% to a three-week low while recording its worst single-day decline in a month, with energy stocks and industrial metal miners leading the market. the decline.
Anglo-American, PA, Royal Dutch Shell and Rio Tinto were the main drag after oil prices fell for a sixth consecutive session from a three-month low, with growth in copper and iron ore prices also recording their multi-month lows amid concerns about the economy. demand.
European stocks fell to their biggest daily loss in a month on Thursday as a drop in commodity prices pushed mining stocks down, while luxury stocks were hit by a surge in Chinese wealth redistribution .
The pan-European Stoxx 600 fell 1.6% to its two-week low, as mining shares slipped 4.2% in their biggest single-day decline since March.
Luxury stocks highly exposed to the Chinese economy such as LVMH, Kering and Richemont fell between 5.8% and 9.2% on Beijing’s plans to target excessive corporate profits and wealth inequality.
Bank stocks, including Asian-focused HSBC, as well as Spain BBVA and from France BNP Paribas fell about 3 percent each.
The travel and recreation index fell 2.5% as an increase in cases of the Delta variant added to fears of slowing global growth and shone a strong earnings season of business in the second quarter.
Wall Street indices were supported by gains in defensive and heavy tech stocks on Thursday afternoon, as investors worried about when the Federal Reserve could start scaling back its massive stimulus package. The Dow Jones pulled back on losses in growth-sensitive sectors, while gains in major tech stocks kept the Nasdaq in positive territory.
Defensive sectors such as utilities and consumer staples were the best performers, while technology edged up. The S&P energy sector was the worst performer among its peers, as oil prices hit a three-month low, while the materials sector fell after copper prices fell.
Data from the US Department of Labor on Thursday showed weekly jobless claims were at their lowest level in 17 months, further confirming the idea that a labor market recovery was underway.
Macy’s and Kohl’s rose 17.7% and 6.6%, respectively, after raising their annual outlook, as rising vaccination rates brought more U.S. shoppers back to their stores. – Additional reports: Reuters