Europe: Shares touch 1-week low after weak China data hits miners

[LONDON] European shares slipped to a one-week low on Tuesday, after poor trade data from China, the world's top metals consumer, put pressure on industrial metals prices and the mining sector.

China's February trade performance was far weaker than economists had expected, with exports tumbling the most in more than six years, days after Beijing sought to reassure investors that the outlook for the world's second-largest economy is solid.

The STOXX Europe 600 Basic Resources index fell 9.3 per cent, the top sectoral decliner, dragged down by falls of 8.5 to 18.1 per cent in the shares of BHP Billiton, Anglo American, Rio Tinto and Glencore.

"Much weaker Chinese exports clearly point to additional trouble for the Chinese economy in the months ahead, with the global growth slowdown continuing to take a toll," said Markus Huber, trader at City of London Markets. "Furthermore, putting early pressure on stocks is the notion that any ECB action being taken on Thursday is already priced in, leading to profit-taking ahead of the ECB meeting."

According to a Reuters poll of traders published on Monday, the European Central Bank will expand the size of its monthly asset purchases on Thursday. Traders also expect another cut to the already negative deposit rate.

The pan-European FTSEurofirst 300 index, which reached one-month highs on Friday after three straight weeks of gains, was down 0.9 per cent to 1,329.36 points at the close, having touched its lowest level in a week.

Brent crude prices also fell, pressuring the oil and gas sector, which ended down 2.5 per cent.

Across Europe, Britain's FTSE and France's CAC both fell 0.9 per cent, with Germany's DAX down the same amount despite solid data.

German industrial output rose in January at its fastest pace in more than six years, showing that the engine room of Europe's largest economy began 2016 well despite the financial market turmoil that has hurt business sentiment.

Saipem shares fell 14.8 per cent after two of the banks that guaranteed a recent stock issue at the Italian oil services group sold a 6 per cent stake at a discount on Monday.

Shares in French supermarket retailer Casino fell by 1.8 per cent after criticism from US research firm Muddy Waters. Casino had no immediate comment.

Symrise fell 1.9 per cent in heavy trade of nearly three times its 90-day average volume after the scents and flavours maker posted weak fourth quarter results.

However, Burberry rose 6.6 per cent after the Financial Times reported the luxury goods group was seeking help to fight off a takeover bid.

REUTERS