Europe: Shares close lower with upcoming US data in focus; Siemens slides

EUROPEAN shares closed lower on Thursday, as investors shifted their focus to crucial US economic data following the end of the nation’s longest government shutdown, while Siemens fell after an underwhelming earnings report.

The pan-European Stoxx 600 index ended down 0.6 per cent at 580.67 points. It had logged an intraday record high earlier in the day. Germany’s DAX declined 1.4 per cent, while Britain’s FTSE 100 lost 1.1 per cent.

“Basically, it’s a fact of buy the rumour, sell the fact. Now that we’ve got the government shutdown, the longest in the US’s history, finished, people are taking profit,” said Axel Rudolph, senior technical analyst at IG Group.

Fed rate cut expected

Late on Wednesday, US President Donald Trump signed legislation to end the government shutdown, paving the way for federal agencies to resume collecting data crucial for policymaking.

September’s jobs report will likely be the first to be released in the days to come. After private surveys signalled cracks in the labour market, investors expect an imminent Federal Reserve interest rate cut.

“There is the possibility some of (the data) won’t be released at all,” said Kyle Rodda, senior financial market analyst at Capital.com.

“That could extend the uncertainty beyond the resumption of government services, with the markets and policymakers, if not flying blind, then at least blinkered going into the next Fed decision.”

Optimism over the imminent end of the shutdown had helped the Stoxx index hit record highs recently.

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Siemens tumbles as outlook disappoints

European industrial stocks lost 1.8 per cent with Siemens falling 9.4 per cent as a hike in its medium-term sales growth forecast failed to allay investors amid profit-taking and disappointment about next year’s profit outlook. It unveiled plans to reduce its stake in Siemens Healthineers.

The financial services sector declined 2.3 per cent. Investment company 3i Group fell 17.4 per cent, logging its worst day ever, after it said it was cautious in deploying capital into new investment.

Tech stocks fell 0.5 per cent, while energy stocks lost 1.2 per cent.

In other moves, Italian asset manager Azimut slumped 10.1 per cent after saying that a Bank of Italy inspection had found “significant governance and organisational shortcomings” at one of its units.

Danish pharmaceuticals firm Alk-Abello jumped 11.5 per cent after the allergy specialist hiked its annual forecast.

German healthcare company Merck rose 4.9 per cent after reporting a slight gain in third-quarter operating earnings that beat market expectations.

Renk rose 7.2 per cent. The tank gearbox maker confirmed its full-year revenue and profit forecasts.

Data showed Britain’s economy barely expanded in the third quarter.

Meanwhile, euro zone industrial production rose far less in September than economists had predicted, skewed by Ireland. REUTERS