EUROPE MARKETS: China Data Whacks European Markets
June 14 2019 - 5:08AM
Dow Jones News
By Dave Morris
Weak China industrial data rattled European markets, sending
equity indexes into negative territory over global growth
fears.
How did markets perform?
The Stoxx 600 shrank 0.4% to 379, after rising 0.2%
Thursday.
The U.K.'s FTSE 100 was at 7,352.2, down 0.2% following
Thursday's flat close.
The pound fell 0.2% to $1.2645, after shrinking 0.3%
Thursday.
In Germany, the DAX was 0.6% lower at 12,097.9. It increased
0.4% on Thursday.
France's CAC 40 edged down 0.2% to 5,364. It also closed flat on
Thursday.
Italy's FTSE MIB retreated 0.2% to 20,595, after climbing 0.8%
Thursday.
What's moving the markets?
Economic data out of China
(http://www.marketwatch.com/story/chinas-economy-cools-further-in-may-2019-06-14-44851138)
set investors on a pessimistic path Friday, as U.S. tariffs
appeared to bite. Industrial production in May grew 5% year over
year, lower than the 5.5% consensus and the lowest growth figure in
the category in more than 17 years. Fixed asset investment was also
a disappointment, expanding 5.6% in the first five months of the
year versus 6% expected. The slowing of China's economy is forecast
to pressure the outlook for global growth in 2019.
One analyst believes Friday's weak trading volumes could
indicate complacency among investors that central banks will
support equities with fresh stimulus. Ian Williams, economics and
strategy research analyst at Peel Hunt, wrote: "The most notable
feature of yesterday's European equity trading session was the
subdued level of volumes... There is a danger that confidence in
the Fed rising to the rescue of risk assets once again next week
has been overdone."
In the U.S., more than 600 companies including Walmart Inc. and
Target Corp. and 150 trade associations signed a letter urging
President Donald Trump's administration to resolve the trade
dispute with China
(http://www.marketwatch.com/story/us-companies-urge-trump-to-find-solution-to-end-trade-war-2019-06-13)
to avoid damaging the national economy. The move comes ahead of a
potential meeting between Trump and Chinese President Xi Jinping at
the G-20 summit in Osaka, though nothing has yet been
confirmed.
In other international disputes, the Toronto Raptors beat the
Golden State Warriors 114-110
(http://www.marketwatch.com/story/raptors-hold-off-depleted-warriors-to-win-their-first-nba-title-2019-06-13)
to win the National Basketball Association championship four games
to two, the first championship in franchise history.
Which stocks are active?
Signs of weaker economic growth hit European financial
companies' shares, as lower interest rates are expected to restrain
lenders' profitability. HSBC Holdings PLC (HSBA.LN) shares fell
0.8%, while Banco Santander SA (SAN.MC) was down 0.6%.
European semiconductor companies were stung by Broadcom Inc.'s
(AVGO) announcement that it expected the U.S. ban on Huawei
equipment to cost it $2 billion in annual sales
(https://www.wsj.com/articles/broadcom-lowers-revenue-outlook-amid-trade-tensions-11560459528).
Broadcom is the first chip maker to quantify the impact of the ban.
Infineon Technologies AG (IFX.XE) shares slumped 5.3%,
STMicroelectronics (STM.FR) declined 4.2% and AMS AG (AMS.EB) sank
7.4%.
(END) Dow Jones Newswires
June 14, 2019 05:53 ET (09:53 GMT)
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