Europe: Tech drag weighs on Stoxx 600 despite Inditex boost
EUROPEAN shares reversed course to close lower on Wednesday as a boost from Spanish fast-fashion giant Inditex was offset by a pullback in technology stocks.
The pan-European Stoxx 600 ended 0.02 per cent lower at 552.29 points.
Inditex climbed 6.4 per cent after the company said sales had picked up between Aug 1 and Sep 8 after months of poor demand. The gains helped lift Spain’s benchmark index by 1.25 per cent to a two-week high, while the Stoxx 600’s retail sub-index advanced 1.4 per cent.
Additional support for the Stoxx 600 came from the European aerospace and defence index, which rose 1.44 per cent to a record high.
Geopolitical uncertainties escalated after Poland shot down drones that entered its airspace during a widespread Russian attack in western Ukraine.
Overall gains were suppressed by technology, which was the day’s poorest performing sector, falling 1.65 per cent and snapping a five-day winning streak - its longest in three months.
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“It might just be a case of following the overall theme where we’re seeing more cyclical stocks outperforming the tech heavyweights,” said Daniela Hathorn, senior market analyst at Capital.com.
Travel and Leisure shares fell 1.4 per cent.
Britain’s benchmark FTSE 100 and Germany’s DAX fell 0.2 per cent and 0.4 per cent, respectively.
France’s CAC 40 rose 0.15 per cent after President Emmanuel Macron appointed loyalist and former defence minister Sebastien Lecornu as prime minister on Tuesday, the fifth one in less than two years.
Recent governments in the country have struggled to unify over plans to rein in debt-fuelled fiscal spending, and investors are bracing for Fitch’s verdict on the country’s credit rating on Friday.
S&P Global, meanwhile, said the appointment of a new French PM will do little to solve the country’s fiscal problems and uncertain political environment.
Lecornu is tasked with steering the 2026 budget through parliament to kick-start efforts to reduce the euro zone’s largest deficit.
“Europe itself is very fragmented and any new prime minister, any new president is going to be heavily scrutinised on how they try and create a more unified environment,” Capital.com’s Hathorn added.
Novo Nordisk rose 3.6 per cent after the Danish company said it could cut about 11.5 per cent of its workforce as it struggles to remain competitive in the weight-loss drug market.
Primark’s owner, Associated British Foods, fell 13.3 per cent - its biggest one-day drop in nine years - after warning that underlying sales will decline in its second half.
Fintech company Nexi fell 9.5 per cent after Barclays cut its target price on the stock, citing growing risks for its domestic market due to ongoing industrial shifts and next-gen competitors.
The European Central Bank’s monetary policy decision is due on Thursday, with economists anticipating no change in rates, but the bigger focus will instead be on the release of US inflation data. REUTERS
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