European shares fall as uncertainty prevails; tech, luxury hit

October 10, 2018 | By | Reply More

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Traders work on the floor of the New York Stock Exchange (NYSE) on August 1, 2017 in New York City. (AFP pic)

LONDON: European shares fell on Wednesday as investors assessed whether worries about global growth warranted the caution that led Wall Street and Asian markets to trade sideways the day before.

The tech sector was the worst performer, with Austrian chipmaker AMS falling close to 7% and STMicroelectronics down about 4%.

Luxury stocks were rattled by fears of a Chinese slowdown and a Morgan Stanley “underweight” call on luxury stocks.

“We are seeing more investors opting to wait and see how risks surrounding rising US Treasury yields, global growth and China play out”, Jasper Lawler of LCG wrote in a morning note.

Shares in France’s LVMH fell 4.2%, even though its fashion and leather goods unit did better than expected in the third quarter.

Concern over ebbing demand by Chinese consumers for branded goods have hit luxury stocks in recent days, as a trade war between Beijing and Washington simmers.

The pan-European STOXX 600 index was down 0.36% by 0819 GMT. Germany’s DAX retreated 0.52% and France’s CAC 40 lost 0.7%.

Britain’s FTSE dropped 0.27% as reports of progress in Brexit negotiations led to gains by sterling, which would hit the overseas revenues of British companies. Luxury group Burberry fell 4.4%.

In Italy, Milan’s FTSE MIB recovered after an initial fall and rose 0.1% despite heavy losses from luxury clothing company Moncler, down 5.2%.

Italian banks jumped 1.6% as yields on the country’s sovereign debt fell after Italian Economy Minister Giovanni Tria confirmed budget forecasts and said he expected a collaboration with the European Union over the budget.

Shares in VAT Group posted the worst performance overall on the STOXX 600, down 10.2%. The Swiss industrial valves manufacturer said it would shorten work for some employees as demand softened in certain markets.

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