Europe: Shares knocked back by weak mining and financial stocks

[LONDON] European shares fell on Thursday as underwhelming Chinese trade data knocked down mining stocks while Standard Life and Aegon slid on broker downgrades.

The pan-European Stoxx 600 index fell 0.9 per cent. The index, which is down by around 8 per cent so far in 2016, fell as much as 1.4 per cent earlier in the session to hit its lowest point since July 12. The Basic resources, Insurance and Bank indexes were the three biggest sectoral losers with a drop of more than 2 per cent.

Standard Life fell 5.1 per cent after Barclays cut the stock to "underweight" while insurer Aegon fell 5.9 per cent after Societe Generale cut it to a "hold" on worries over variable annuities in the United States.

Dutch navigation firm TomTom fell 7.8 per cent after it said sales of its personal navigation devices had been weaker than expected in the third quarter.

Mining stocks such as BHP Billiton and Rio Tinto took a hit after trade data from China, which is the world's biggest consumer of metals.

"A 10 per cent fall in Chinese exports in September not only provides a warning signal that the world's second largest economy is losing momentum, but also suggests fragile global demand," said FXTM chief market strategist Hussein Sayed.

US bank Citigroup also cut its rating on BHP Billiton and Rio Tinto to "sell" from "neutral".

Shares in Unilever and Tesco also fell, with the two companies locked in a row over pricing sparked by a plunge in sterling caused by Britain's vote in June to quit the European Union.

Sterling has shed 18 per cent against the US dollar since the "Brexit" vote.

After a brief period of stability, the sell-off has worsened again in the past two weeks on signs that the government would prioritise controls on immigration over access to the European single market.

"A weaker pound can only mean higher prices for consumers or lower margins for suppliers and retailers, or a combination of all of these," said ETX Capital markets analyst Neil Wilson.

"Supermarkets are afraid to raise prices and the Tesco-Unilever tussle is a symptom of a bitter sector price war that is crimping margins," added Mr Wilson.

REUTERS