Investing.com - European stock markets remained sharply lower on Tuesday, following the release of mixed U.S. housing data, as miners and automakers came under heavy selling pressure amid concerns over an abrupt slowdown in China.
During European afternoon trade, the EURO STOXX 50 dropped 1.2%, France’s CAC 40 tumbled 1.3%, while Germany’s DAX 30 sank 1.4%.
European equities showed little reaction to a report from the U.S. Commerce Department saying U.S. housing starts fell in February, but the number of building permits issued rose to the highest level since October 2008.
Shares in automakers extended earlier losses after an official at China’s association of carmakers said auto sales will miss its forecast in 2012.
Shares in Germany’s BMW tumbled 4.75%, while rivals Daimler and Volkswagen dropped 4.15% and 4.1% respectively. In France, Peugeot shares plunged 5.1%, while Renault declined 3.9%.
Building material makers also contributed to losses, with Lafarge down 3.3% in Paris, while HeidelbergCement and ThyssenKrupp dropping 3.3% and 3.1% in Frankfurt.
China increased fuel prices for the second time in less than six weeks on Monday, sparking concern growth in the world’s fastest-growing major economy may slow more-than-expected.
The rising cost of gasoline is also a threat to the global economic outlook as it could spark inflation and hurt consumer spending.
A deeper slowdown in China would impair a global expansion that is already faltering because of Europe’s debt crisis.
Shares in the financial sector were also lower a day after Greece concluded an auction to settle credit-default-swap contracts on its government bonds. BNP Paribas and Societe Generale declined 1.95% and 2% respectively, while Deutsche Bank shares slumped 1.75%.
Meanwhile, Italian lender Unicredit and Intesa Sanpaolo were down 1% and 1.35% respectively, as investors eyed the outcome of talks aimed at reforming Italy’s economy.
On the upside, Germany’s largest retailer METRO rose 1.5% after reporting fourth-quarter earnings of EUR1.31 billion, matching analysts’ estimates.
Elsewhere, London’s commodity-heavy FTSE 100 retreated 1.2%, as miners extended losses amid concerns over a slowdown in demand from China, which is the top consumer for many commodities.
Mining giant BHP Billiton tumbled 3.65% after its chairman reportedly said the miner was revaluating its capital-spending plans amid slowing growth in China. The company also said Chinese demand for iron ore was "flattening out."
The comments weighed heavily on other shares in the sector, with Rio Tinto dropping 3.85%, while copper miners Antofagasta and Anglo American declined 3.65% and 3.35% respectively.
Financial sector stocks performed poorly, tracking their European counterparts lower. Barclays shares retreated 2.1%, while Lloyds Banking Group and Royal Bank of Scotland fell 2.75% and 2.35% respectively.
But shares in Essar Energy bucked the trend, rising sharply for a second day after Merrill Lynch forecast on Monday that shares in the power group would more than double. Essar shares were up 4.9%, adding to Monday’s almost 13.5% increase.
Official data released earlier in the U.K. showed that the annual rate of consumer price inflation eased to the lowest since November 2010 in February, dampening expectations for a fresh round of easing measures by the Bank of England.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a drop of 0.55%, S&P 500 futures slumped 0.55%, while the Nasdaq 100 futures indicated a decline of 0.5%.
Later in the day, Federal Reserve Chairman Ben Bernanke was to speak at an event in Washington; his comments would be closely watched.
During European afternoon trade, the EURO STOXX 50 dropped 1.2%, France’s CAC 40 tumbled 1.3%, while Germany’s DAX 30 sank 1.4%.
European equities showed little reaction to a report from the U.S. Commerce Department saying U.S. housing starts fell in February, but the number of building permits issued rose to the highest level since October 2008.
Shares in automakers extended earlier losses after an official at China’s association of carmakers said auto sales will miss its forecast in 2012.
Shares in Germany’s BMW tumbled 4.75%, while rivals Daimler and Volkswagen dropped 4.15% and 4.1% respectively. In France, Peugeot shares plunged 5.1%, while Renault declined 3.9%.
Building material makers also contributed to losses, with Lafarge down 3.3% in Paris, while HeidelbergCement and ThyssenKrupp dropping 3.3% and 3.1% in Frankfurt.
China increased fuel prices for the second time in less than six weeks on Monday, sparking concern growth in the world’s fastest-growing major economy may slow more-than-expected.
The rising cost of gasoline is also a threat to the global economic outlook as it could spark inflation and hurt consumer spending.
A deeper slowdown in China would impair a global expansion that is already faltering because of Europe’s debt crisis.
Shares in the financial sector were also lower a day after Greece concluded an auction to settle credit-default-swap contracts on its government bonds. BNP Paribas and Societe Generale declined 1.95% and 2% respectively, while Deutsche Bank shares slumped 1.75%.
Meanwhile, Italian lender Unicredit and Intesa Sanpaolo were down 1% and 1.35% respectively, as investors eyed the outcome of talks aimed at reforming Italy’s economy.
On the upside, Germany’s largest retailer METRO rose 1.5% after reporting fourth-quarter earnings of EUR1.31 billion, matching analysts’ estimates.
Elsewhere, London’s commodity-heavy FTSE 100 retreated 1.2%, as miners extended losses amid concerns over a slowdown in demand from China, which is the top consumer for many commodities.
Mining giant BHP Billiton tumbled 3.65% after its chairman reportedly said the miner was revaluating its capital-spending plans amid slowing growth in China. The company also said Chinese demand for iron ore was "flattening out."
The comments weighed heavily on other shares in the sector, with Rio Tinto dropping 3.85%, while copper miners Antofagasta and Anglo American declined 3.65% and 3.35% respectively.
Financial sector stocks performed poorly, tracking their European counterparts lower. Barclays shares retreated 2.1%, while Lloyds Banking Group and Royal Bank of Scotland fell 2.75% and 2.35% respectively.
But shares in Essar Energy bucked the trend, rising sharply for a second day after Merrill Lynch forecast on Monday that shares in the power group would more than double. Essar shares were up 4.9%, adding to Monday’s almost 13.5% increase.
Official data released earlier in the U.K. showed that the annual rate of consumer price inflation eased to the lowest since November 2010 in February, dampening expectations for a fresh round of easing measures by the Bank of England.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a drop of 0.55%, S&P 500 futures slumped 0.55%, while the Nasdaq 100 futures indicated a decline of 0.5%.
Later in the day, Federal Reserve Chairman Ben Bernanke was to speak at an event in Washington; his comments would be closely watched.