European stocks slide to 1-month low on China slowdown fears
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[April 25, 2022] By
Sruthi Shankar and Anisha Sircar
(Reuters) - The main European stock indexes
fell more than 2% on Monday as worries about an economic slowdown in
China and rapid U.S. interest rate hikes overshadowed relief from French
President Emmanuel Macron's election victory over the weekend.
The continent-wide STOXX 600 index slumped 2.1% to its lowest since
mid-March, with UK's FTSE 100 sliding 2.2% and Germany's DAX down 1.6%.
China-exposed sectors such as miners, oil & gas and luxury stocks were
among the top decliners in Europe as fears grew that Beijing was on the
verge of joining Shanghai in pandemic-related lockdowns.
Miners dipped 5.5% to a one-month low as industrial metal prices slumped
on concerns about waning demand from top metals consumer China, while
oil and gas stocks dropped 3.3%. [MET/L]
France's CAC 40 dropped 2.4%, caught in a wider risk-off move, even as
Sunday's election results showed pro-EU centrist Macron beating
far-right challenger Marine Le Pen with a solid margin.
French stocks have outperformed the wider STOXX 600 index over the past
two weeks after polls put Macron in the lead, reassuring markets about
France's commitment to an integrated Europe even if his economic
platform now depends on parliamentary elections in June.
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That followed a brief period of volatility in markets when polls showed
a relatively small lead over Le Pen, who favours nationalising key
industries and slashing taxes.
"What we saw these last two weeks is the repricing of Macron victory as
polls have been widening. So for the market it is good news, but the
impact should be relatively limited today," said Roland Kaloyan, head of
European equity strategy at Societe Generale.
"The new story today is about China and the market is very worried about
the impact of that on supply chains."
Defensive sectors such as utilities,food and beverage and telecom
stocks, which tend to outperform at times of economic uncertainty, were
the smallest decliners.
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The German share price index DAX graph is pictured at the stock
exchange in Frankfurt, Germany, April 22, 2022. REUTERS/Staff
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Shares of French infrastructure group Vinci gained 0.8% after a sell-off on
fears the groups may be targeted for nationalisation by Le Pen.
A gauge of eurozone stock market volatility spiked above 30 points for the first
time in almost two weeks.
European markets suffered last week, taking cues from Wall Street indexes as
investors priced in aggressive actions by the U.S. Federal Reserve to tame
inflation, knocking rate-sensitive growth shares. [.N]
In a busy week for earnings, 144 of the STOXX 600 companies are expected to
report quarterly results.
Dutch health technology company Philips plunged 11.1% to its lowest since 2016
after reporting a hit to first-quarter profit due to a global shortage of parts
and a massive recall of ventilators.
French gaming group Ubisoft jumped 10.9% after a report on Friday said the
"Assassin's Creed" maker is attracting preliminary takeover interest from buyout
funds.
Graphic: European market performance in the run-up to France's presidential
election on Sunday -
https://fingfx.thomsonreuters.com/
gfx/mkt/dwvkryezkpm/European%20markets%20and%20Macron.PNG
(Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru; Editing by Shounak
Dasgupta)
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