Europe: Shares fall after three days of gains; HelloFresh tumbles

EUROPE’S benchmark index fell on Thursday (Nov 16), dragged down by energy stocks, following a three-day run of gains on hopes for a peak in interest rate policy tightening and eventual rate cuts.

The pan-European Stoxx 600 closed 0.7 per cent lower after gaining 2.5 per cent over the past three days and hitting a more than one-month high on Wednesday.

During the week, inflation data out of the United States and Britain reinforced hopes that their central banks were done raising rates. Investors are shifting focus to the eurozone’s inflation reading on Friday.

“A bit of profit-taking is going on following the wave of euphoria after lower-than-expected inflation led to quite a lot of optimism that perhaps rate cuts would come sooner rather than later,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“Also, clouds have been gathering over the eurozone economy for some time with Germany in particular facing a slowdown.”

Energy stocks led sectoral declines with a 2.7 per cent fall, tracking weakness in crude oil prices on signals of higher supply in the United States and expectations of weak energy demand in China.

Also dampening the mood was fresh data pointing to persistent problems in China’s housing sector that could disrupt the top metal consumer’s overall recovery.

The luxury goods sector eased 1.5 per cent.

Prominent names, including Kering, LVMH and Richemont shed between 1.8 per cent and 2.7 per cent each. This followed Burberry’s 11.1 per cent drop after the British luxury fashion brand said it was grappling with a slowdown in global spending on luxury and would struggle to meet its annual revenue forecast.

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Europe: Shares hit over one-month high on easing inflation

HelloFresh slumped 22.4 per cent to the bottom of the Stoxx 600 after the German meal-kit maker cut its annual core profit outlook and narrowed revenue growth guidance.

German chemicals maker BASF lost 2.5 per cent following a Jefferies rating downgrade.

On the upside, Embracer rose 3.2 per cent after the Swedish games developer posted a bigger-than-expected second-quarter operating profit.

Siemens gained 5.7 per cent after the trains-to-industrial software maker posted better-than-estimated fourth-quarter industrial profit, helping Germany’s DAX rise 0.2 per cent.

Spain’s parliament voted to make Pedro Sanchez prime minister for another term, ending a protracted deadlock after an inconclusive general election in July. Spain’s IBEX gained 0.3 per cent. REUTERS