European shares hit 22-month low, risk-off mood prevails

The German share price index, DAX board, is seen at the stock exchange in Frankfurt January 10, 2018. — Reuters pic
The German index, DAX board, is seen at the stock exchange in Frankfurt 10, 2018. — Reuters pic

LONDON, Oct 15 — failed to rebound and hit a 22-month low today after their worst week since a correction in February as threats such as trade wars, rising US yields, growth, Brexit and the Italy/EU budget row continued to weigh on markets.

For European bourses there was no wind of optimism from Asia where stocks suffered as rising diplomatic tensions between Riyadh and the West over the disappearance of a journalist pushed oil higher.

At 0754 GMT, the pan-European STOXX 600 was down 0.6 per cent at 356.8 points, levels not seen since December 2016.

Noting that had managed to stage a rebound on Friday, ING analysts stressed that risks were still on the upside.

“Just as you shouldn’t breathe too big a sigh of relief after earth tremors end, we remain anxious of a market that seems jittery, even against the backdrop of a very strong US economy”, the bank’s analysts told its clients.

European shares have underperformed their American peers since the beginning of the year and analysts believe companies which fail to meet expectations during the third quarter corporate earnings season will be severely punished.

British ConvaTec was the worst performer on the STOXX 600 down 28 per cent, after cutting its forecast and announcing its CEO was stepping down.

A profits warnings from Superdry sent the British fashion group down 17 per cent.

Swedish medical equipment Getinge fell about 12 per cent after announcing a 200.5 million provision related to surgical mesh product liability claim.

Among winners in the early trading session was Chr Hansen, up 4.6 per cent with better-than expected results.

Britain’s Nex rose 5 per cent after US competition authorities gave their green light for CME Group to acquire the company.

Shares in miner Randgold were also among the top performers, up 3.6 per cent, as prices hit a near 12-week high with investors looking for safe havens. — Reuters

Source: The Malay Mail Online

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