Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

European shares slides to 6-month low on China, Italy worries

Published 10/08/2018, 12:13 PM
Updated 10/08/2018, 12:13 PM
© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

By Julien Ponthus and Danilo Masoni

LONDON/MILAN (Reuters) - European shares fell on Monday as fears a trade war could have a bigger impact than expected on China added to concerns that rising U.S. interest rates are gradually making stock markets less attractive for investors.

A mounting clash between Rome and Brussels over the Italian government's spending plans also soured the mood.

"The re-emergence of the Italy/EU budget deficit battle as a key market mover proved to be a disaster for the European indices," Spreadex analyst Connor Campbell said.

Shares in Asia slumped overnight despite Beijing's central bank increasing liquidity to offset the effects of the tariff row with the U.S., while Wall Street started in the red.

The pan-European STOXX 600 (STOXX) benchmark index fell 1.1 percent to its lowest close in around six months, while the export-oriented German index (GDAXI) fell 1.4 percent.

Italy's FTSE MIB (FTMIB) suffered the most, falling 2.4 percent to its lowest in more than 17 months as banking stocks came under fresh pressure after Italy's borrowing costs soared further.

Italian banks (FTIT8300), whose large government bond holdings makes them sensitive to political risk, declined 3.7 percent, also weighing on the broader European banking sector.

Top faller on the STOXX was German fintech company Wirecard (DE:WDIG), which fell 12 percent with traders citing technical factors. Wirecard shares, which ousted Commerzbank (DE:CBKG) from the DAX index, are up 78 percent so far this year.

Hearing aid maker William Demant (CO:WDH) was another big faller, down 10.6 percent, on competition worries after the U.S. approved Bose Corp's new hearing aid, which can be used without a doctor's assistance.

Shares in two other hearing aid makers, Sonova (S:SOON) and Amplifon (MI:AMPF), fell 8.7 percent and 1.6 percent respectively.

© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

Norsk Hydro (OL:NHY) was a bright spot, up 3.9 percent after the aluminum firm received a permit helping it towards restarting its Alunorte alumina refinery at half capacity.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.