Europe: Shares see worst day in nearly eight weeks after stellar 2023

    • The Stoxx 600 ended 0.9 per cent lower on Wednesday, hitting its lowest level since Dec 14 and logging its worst single-day performance since November.
    • The Stoxx 600 ended 0.9 per cent lower on Wednesday, hitting its lowest level since Dec 14 and logging its worst single-day performance since November. PHOTO: REUTERS
    Published Thu, Jan 4, 2024 · 06:14 AM

    EUROPE’S benchmark stock index dropped to a three-week low in a broad-based sell-off on Wednesday, testing 2023’s rally spurred by hopes of major central banks pivoting to easier monetary policy this year.

    The pan-European Stoxx 600 ended 0.9 per cent lower, hitting its lowest level since Dec 14 and logging its worst single-day performance since November after kicking off the New Year on a lacklustre note on Tuesday.

    Flagship indexes in Germany, Italy and France each slid over 1 per cent, hitting near one-month lows.

    Construction and materials led sectoral declines, dropping 2.9 per cent, logging its worst single-day percentage fall in nearly six months.

    The financial services index declined 2.5 per cent, while weaker metal prices pushed basic resources down 2.3 per cent.

    Luxury giants LVMH, Kering, Hermes and Richemont lost between 1.9 per cent and 3.8 per cent. The broader sector shed 2.7 per cent, hitting its lowest level since late November.

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    Growing expectations that the European Central Bank (ECB) will cut interest rates in 2024 had propelled a 12.7 per cent jump in the benchmark Stoxx 600 in 2023.

    “If something happens that’s not in that script, then there may be some risk of disappointment,” said Russ Mould, investment director at AJ Bell.

    “Markets are just pausing for breath now, waiting for some degree of confirmation, plus there’s no greater amount of news flow to go on at the moment.”

    Among data released on Wednesday, the number of unemployed people in Germany rose slightly in December, though by much less than analysts had expected. US job openings fell for the third straight month in November.

    Wall Street had a dour start to the session ahead of the release of the US Federal Reserve’s December meeting minutes that could offer more clues on its interest rate path.

    On the flipside, healthcare rose 0.8 per cent, clocking its fourth straight session of gains, while telecoms added 0.2 per cent.

    Among individual stocks, Ryanair lost 4.9 per cent after multiple online travel agents stopped selling its flights in early December, and on a traffic numbers update.

    Computer chip equipment maker ASML fell 2.9 per cent, down for the second day, following the Dutch government’s partial revoking of an export licence for some China shipments.

    Maersk advanced 5.1 per cent after Goldman Sachs upgraded the Danish shipping company’s stock rating to “neutral” from “sell”. REUTERS

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