European shares fall as luxurious shares really feel ache from China’s woes By Reuters


© Reuters. FILE PHOTO: The graphic of the German share index DAX is shown on October 8, 2021 on the Frankfurt Stock Exchange. REUTERS / employees

By Anisha Sircar and Sruthi Shankar

(Reuters) – European stocks fell on Monday after weaker-than-expected growth data from China hit luxury stocks, while an unstoppable surge in commodity prices fueled concerns about runaway inflation.

The pan-European index fell 0.5% after an optimistic start to the quarterly reporting season on Friday saw its strongest weekly performance since March.

Asian stocks came under pressure after data showed China’s economy reached its slowest growth in a year in the third quarter, hurt by power shortages, supply chain bottlenecks and large volatility in the real estate market.

Luxury stocks exposed in China such as LVMH, Dry (PA 🙂 and Hermes both fell about 3%, which was also hurt by Chinese President Xi Jinping’s demand for a consumption tax hike.

“(Sentiment) is being driven by some data from China,” said Michael Bell, global market strategist at JP Morgan Asset Management. “It really is the ongoing concern about the slowdown in the real estate market.”

Belgian materials technology and recycling group Umicore was among the biggest laggards, losing 5.5% after cutting its earnings forecast to reflect more than previously expected effects of global semiconductor shortages.

Analysts expect European companies to report a profit jump of almost 47% in the third quarter, according to data from Refinitiv IBES. These numbers have been revised upwards in the past few days and helped the STOXX 600 inches to peak in August.

“If we look at the outlook for the next 12 months, valuations could go down a bit, but not enough to offset the spike we’re seeing in earnings, and that should be pretty positive,” said JPMorgan (NYSE 🙂 said bell.

European miners and oil and gas stocks were among the few winners as crude oil futures surged above $ 85 a barrel and metal prices soared. [O/R] [MET/L] [IRONORE/]

Hut Group rose 5.5% after the SoftBank-backed UK online retailer announced it was removing its founder’s “gold stock” and aiming for a premium listing after its stocks slumped last week.

French biotech company Valneva shot up 32.3% after reporting positive results from a late-stage study for its inactivated, adjuvanted COVID-19 vaccine candidate.

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