Europe: Stocks fall in global tech rout; eyes on German plans
EUROPEAN shares fell to their lowest in nearly a month on Monday, weighed down by declines in tech shares which investors dumped around the world as uncertainty around US tariffs showed no signs of abating.
The pan-European Stoxx 600 closed 1.29 per cent lower at 546.20 points, after the benchmark index snapped a 10-week winning streak on Friday.
Technology shares were the biggest losers on the index, down 3.1 per cent at their lowest level since late January, as rapid shifts in US trade policy and growth concerns in the world’s largest economy left investors in risk-off mode.
The tech-heavy Nasdaq in the US fell 4 per cent to a near six-month low.
“A lot of investors globally are reassessing their risk. Tech is bearing the brunt of it because when there is profit taking or de-risking going on, the most active stocks get hit the hardest,” Steve Sosnick, chief market analyst at Interactive Brokers, said.
“Aggressively cutting back government spending and potentially adding tariffs... it’s understandable why investors are showing more growth fears.”
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Banks and the industrial goods sector, that includes defence stocks, fell 2.7 per cent and 2.1 per cent respectively. Both sectors had rallied recently, after Germany’s bumper fiscal package and prospects of higher defence spending in the region.
Germany’s Greens vowed to block plans by likely next chancellor Friedrich Merz for a massive increase in state borrowing, but left room for compromise on measures to revamp the military and revive growth.
This led to some concerns over the German plan to set aside 500 billion euros (S$721.5 billion) for infrastructure investments over 10 years.
Analysts at Deutsche Bank said that failure to pass the proposed reform would severely limit the scope of a fiscal expansion in the next four years, undermine the next government’s credibility and cause political fragmentation in Germany.
While most sub-sectors on the Stoxx were in the red, utilities and automobile and parts were a bright spot, gaining more than 1.2 per cent each.
On the economic front, German industrial output rose in January, but exports plunged.
Investors looked ahead to Germany’s inflation figures later this week. US President Donald Trump’s 25 per cent tariffs loom large with the US not seeking a deal to avert them.
Novo Nordisk fell 8.1 per cent after revealing weaker-than-expected data from a second late-stage trial of its obesity drug candidate CagriSema.
Verallia gained 3.7 per cent after Brazil’s Moreira Salles family said it would launch a takeover bid for all shares of the French bottler and confirmed it would pay 30 euros (S$43.40) for each, valuing the company at 6.1 billion euros. REUTERS
Share with us your feedback on BT's products and services
