Europe close: Stocks walloped by growing list of concerns
By Alexander Bueso
Date: Monday 10 Dec 2018
(Sharecast News) - Stocks on the Continent were pummeled at the beginning of the week, weighed down by the Prime Minister's surprise decision to call off a vote on Brexit in parliament, weak data out of China at the weekend and concerns around the US-China trade talks.
Commenting on the day's market action, Chris Beauchamp at IG said: "with US-China trade suffering amid the imprisonment of Huawei CFO Meng Wanzhou, and the Brexit process looking more and more shambolic by the day, there is little reason to be optimistic for the time being."
News originating on the Continent was also quite worrying, especially in France, which saw a fourth consecutive weekend of demonstrations in Paris against the government's proposed fuel tax hikes, with 125,000 protesters having reportedly taken part, 1,200 of which were arrested.
On a tad more positive note, perhaps, reports at the weekend indicated the government in Rome was willing to to lower its target for Italy's budget deficit next year to 2.2% of GDP, versus an initial goal of 2.4%, although that remained above the 1.9% target that the European Commission had been pushing for.
By the end of trading, the benchmark Stoxx 600 was down by 6.46 points or 1.87% to 338.99, alongside a drop of 1.54% or 166.02 points to 10,622.07 for Germany's Dax.
France's Cac-40 meanwhile was off by 1.47% or 70.75 points at 4,742.38 while Milan's FTSE Mibtel was down by 1.77% or 331.85 points at 18,410.13.
In parallel, euro/dollar dropped 0.47% to 1.13574 but added 1.01% versus Sterling to 0.90454.
Pacing losses on the Continent, the Stoxx 600 sector gauge for Basic Resources skidded 2.75% lower to 377.36, while another tied to lenders' shares fell 2.66% to 133.38.
Weighing on the former, data published at the weekend revealed that Chinese import growth slowed to a 3% pace in year-on-year terms during the month of November, which was down from 20.8% in October (consensus: 9.7%).
Those figures from China's customs administration underlined worries around global growth, and although most analysts appeared to be dismissive, financial markets had recently begun to question whether the US central bank would go ahead with another interest rate hike at the end of the month.
On top of that, on Sunday, Beijing summoned the US ambassador to protest against the detention of Huawei's finance director in Canada, with China possibly of the belief that it was an intentional move on the part of the White House, according to some market-watchers.
Chemical stocks was one of the weakest areas of the market throughout much of the session, with the corresponding sector gauge down by 1.90% to 792.90 after BASF warned on profits, citing low water levels on the Rhine, trade war worries and soft demand for autos.
Possibly highlighting the toll that protests were taking on France's economy, a monthly index compiled by the country's central bank revealed that the quarter-on-quarter rate of growth in French GDP had slowed from 0.4% over the three months to September to 0.2% in the fourth quarter.
Back in Italy, ISTAT reported a 0.1% month-on-month rise in industrial output as production of durable consumer goods jumped by 2.6% versus September.
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