China jitters, earnings drag Europe's STOXX 600 to three-month low (updated)
12/11/2024 10:01
(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
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Basic resources lead sectoral losses
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Trump and coalition collapse dent German investor morale
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Bayer sinks on 2025 earnings fall forecast
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UK's Convatec Group shares jump after FY24 guidance raise
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STOXX 600 down 2%
(Updated with closing levels)
By Shashwat Chauhan and Pranav Kashyap
Nov 12 (Reuters) -
Europe's main index plunged 2% to a near three-month low on
Tuesday, as concerns over the fate of U.S.-China relations cast
a shadow over stocks with significant exposure to the world's
No. 2 economy, while some downbeat earnings also weighed.
The STOXX 600 .STOXX also notched its steepest one-day
decline since early August after Monday's 1% jump.
European equities have been under stress as investors
assessed the likelihood of tariff increases after Trump's
sweeping U.S. presidential victory last week.
China-related assets struggled globally as Trump is expected
to tap U.S. Senator Marco Rubio to be his secretary of state,
who has in past years advocated for a muscular foreign policy
with respect to America's geopolitical foes, including China.
"As he's forming his teams and the names are coming
through, the market is having a realization of what could be
coming," said Fiona Cincotta, senior market analyst at City
Index.
"China's economic position is quite fragile and if
you're having huge tariffs being placed on China when it's
already weak, that's going to impact its imports and that will
naturally affect Europe."
Basic resources .SXPP slumped 3.7% as most metal prices
fell, with Polish miner KGHM KGH.WA dropping 9.2% and one of
the worst-hit on the STOXX 600.
Personal and household goods .SXQP , which houses
heavyweight China-exposed luxury firms, dropped 2.4%. The
broader luxury index .STXLUXP was also down nearly 4%.
However, the technology sector .SX8P was largely flat in
the face of deep sectoral losses, driven by a 4% jump in Temenos
TEMN.S following the Swiss banking-software company's
strategic plan to accelerate growth over four years.
Among earnings-driven losses, German group Bayer BAYGn.DE
slumped 14.5% after warning weak agricultural markets could dent
its earnings further next year.
Brenntag BNRGn.DE eased 5% after the German chemicals
distributor reported a third-quarter core profit miss, dragging
the chemicals sector .SX4P 3% lower.
Italy's Mediobanca MDBI.MI dropped 8.2% after cutting
its full-year
net interest income forecast
.
UK's Convatec Group CTEC.L jumped 22% after the medical
products and technologies firm raised its FY24 organic sales
growth forecast.
Infineon IFXGn.DE reversed course to rise 4% after falling
initially, as the German chipmaker forecast lower 2025 revenue
due to weak demand in its end markets aside from AI.
Meanwhile, German inflation rose to 2.4% in October,
confirming preliminary reading, with investor morale clouded
this month amid Trump's win and collapse of the Berlin
government.
A U.S. inflation reading and minutes from the European
Central Bank's last policy meeting are due later in the week.
(Reporting by Shashwat Chauhan, Pranav Kashyap and Ankika
Biswas in Bengaluru; Editing by Mrigank Dhaniwala, Shinjini
Ganguli and Andrea Ricci)
((Shashwat.Chauhan@thomsonreuters.com;))