Europe close: Chinese data, oil price jump dent stocks
By Alexander Bueso
Date: Monday 01 Nov 2021
(Sharecast News) - European stocks fell on Wednesday as investors sifted through disappointing Chinese data and amid surging energy prices.
According to Michael Hewson, chief market analyst at CMC Markets UK, the former triggered concerns that the Chinese economy was in "much worse shape than originally believed".
Regarding the latter, he said that "with energy prices soaring across Europe, the economic outlook is starting to look increasingly uncertain, and while central banks are likely to take that into account, the fact remains that the rebound which was looking so solid a couple of months ago is starting to show signs of slowing markedly."
Against that backdrop, the benchmark Stoxx Europe 600 index was down 0.80% at 463.91, Germany's DAX was 0.68% lower to 15,616.0 and France's CAC 40 was 1.04% weaker at 6,583.62.
Front month Brent crude oil futures meanwhile were up by 2.65% at $75.55 a barrel on the ICE.
Data released out of China earlier showed that retail sales growth fell to 2.5% on the year in August, from 8.5% in July, coming in well below consensus expectations of 7.0%. Meanwhile, industrial production growth slowed to 5.3% in August from 6.4% the month before, versus expectations of 5.8%.
Fixed asset investment growth was 8.9% in August, down from 10.3% in July and more or less in line with consensus of 9.0%.
In the UK meanwhile, figures from the Office for National Statistics showed consumer price inflation saw its biggest increase in August since records began in 1997.
CPI rose to 3.2% from 2% in July, coming in well above the Bank of England's 2% target and consensus expectations of 2.9%.
On a more positive note, figures from Eurostat revealed that eurozone industrial production rose by 1.5% month-to-month in July, having declined by an upwardly-revised 0.1% in June and coming in well above consensus expectations for a 0.6% increase.
The year-over-year rate eased to 7.7% from 10.1% in June but was above expectations for 6.3% growth.
ING said: "Eurozone industrial production recovered strongly in July after two months of contraction. As the seasonal adjustment flatters the summer months, it is too soon to dismiss the negative growth impact of supply chain problems."
In equity markets, Swedish fashion retailer H&M was in the red after its quarterly sales rose less than expected.
Zara owner Inditex was also down, reversing earlier gains despite hailing record sales in the second quarter.
Swedish Match rallied after saying it will spin off its US cigar business to shareholders.
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