BREAKING NEWS

BREAKING NEWS

European stocks drop after tech reboot fails

Now Reading :

European stocks drop after tech reboot fails

European stocks drop after tech reboot fails
@ Copyright :
Toby Melville(Reuters)
Text size Aa Aa

By Marc Jones

LONDON (Reuters) - Europe's share markets dropped back into the red on Thursday as investor worries mounted about slowing global growth in the face of rising U.S. interest rates and trade tensions.

gi

Chinese markets extended their slump in Asia amid the trade war with the United States, and with Wall Street closed later for Thanksgiving, Europe followed suit.

The region had plenty of concerns of its own. Italy was under pressure in both stock [.EU] and bond markets [GVD/EUR] as sparring resumed over its budget plans. Some disappointing big-name earnings added to the gloom.

The dollar <.DXY> also edged lower for a second day as traders sold the greenback going into Thanksgiving and after Wall Street had seen Apple shares <AAPL.O> buckle again after a failed attempt at a rebound. [.N][/FRX]

"I think that the recent moves in equities have largely been about big tech catching up with the rest of the market," said Eoin Murray, the head of investment at Hermes Investment Management.

"Post the (global market) wobbles at the end of January, it has really only been big tech that has run off into the stratosphere ... So this is simply big tech coming back down to earth."

Europe's tech sector lost another 1.2 percent, but it wasn't the worst performer. Banks were 1.6 percent weaker and mining companies and other resources firms were down nearly 2 percent <.SXPP> and approaching a one-month low. [.EU]

That reflected the bitter Sino-U.S. trade war, encouraging investors to take money off the table before U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, meet in Argentina next week.

The focus will be on whether they can make any progress on their trade feud. Singapore became the latest to warn about the potential impact on Thursday. The city state is considered as a bellwether for international trade.

"Risks in the global economy are tilted to the downside," said Loh Khum Yean, Singapore's permanent secretary for trade and industry.

RUSH FOR THE BREXIT

Sterling traded flat at $1.2784 but down 0.1 percent against the euro to 89.19 pence after Prime Minister Theresa May added little to Brexit plans at a meeting with the head of the European Union's executive on Wednesday.

May will return to Brussels on Saturday to try and agree an outline for Britain's withdrawal from the EU. All EU leaders are due to meet on Sunday to approve the deal.

Just over four months before Britain's departure from the EU, Brexit negotiations and political uncertainty in Britain remain the key drivers for the pound, and many analysts are cautious about its prospects.

"With the UK and EU rushing to dot i's and cross t's on a Brexit deal, there's some support for sterling at the moment and some upward pressure on the front end of the rates market," said Societe Generale strategist Kit Juckes.

"Though it won't take long before we refocus on the challenge facing the Prime Minister in getting House of Commons support for her Brexit deal," he added.

Back in the share markets, MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> had ended little changed after recovering from an initial wobble.

The index has managed to hold up so far in November after three straight monthly declines, but is on track for its worst annual performance since 2011.

Japan's Nikkei <.N225> had finished almost 0.7 percent higher but Chinese shares closed 0.4 percent in the red. <.CSI300>

"Investors are still wary about whether they'll see further lows, given none of the issues that drove the recent correction have dissipated," said Shane Oliver, Sydney-based head of investment strategy at AMP.

In commodities, China-sensitive metals like copper fell [MET/L] and oil prices reversed early gains, although they were still above one-year lows touched earlier this week. [O/R]

U.S. crude <CLc1> futures were last down 8 cents at $54.55 a barrel after hitting a one-year low of $52.77 on Tuesday. Brent <LCOc1> eased 15 cents to $63.33, off Tuesday's low of $61.71.

Gold rose, with spot prices <XAU=> at $1,227.98 an ounce.

(Additional reporting by Tom Finn in London and Swati Pandey in Sydney; editing by Larry King)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.