Europe: Shares in the red as downbeat US data stokes growth concerns
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EUROPEAN shares dipped on Monday as investors took profits after last week’s rebound, as news of weak US business activity stirred up economic slowdown worries and eclipsed gains in telecom stocks.
The pan-European STOXX 600 index ended 0.4 per cent lower after a survey showed the US services sector barely grew in May, while factory orders rose less than expected.
“There’s a bit of profit taking after some of the moves we’ve had recently,” said Steve Sosnick, chief strategist at Interactive Brokers.
“The economic reports that we’ve gotten around the world (signal) a somewhat slowing economy.”
US equities stayed firm, boosted by big technology and growth stocks.
The Stoxx 600 index failed to sustain the optimism from Friday’s rally after euro zone inflation eased, the US averted a debt default, and bets grew that the US Federal Reserve could pause its rate hikes this month.
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However, hawkish comments from European Central Bank (ECB) President Christine Lagarde and Bundesbank President Joachim Nagel likely cemented expectations for more rate increases from the central bank in June.
European telecoms rebounded 0.4 per cent from their worst session in 15 months on Friday after Amazon.com Inc said it was in talks to offer low-priced mobile services.
Shares of Indivior Plc jumped 7.8 per cent to top the Stoxx 600 index after the drugmaker agreed to pay US$102.5 million to settle a lawsuit for its opioid addiction treatment Suboxone.
Asos jumped 7.1 per cent on a report that the fashion retailer received a £1 billion bid from Alibaba-backed rival, Trendyol.
Shares of Viaplay Group plunged 62.7 per cent to a record low after the Swedish streaming company warned of a weakening business environment and said it was replacing its chief executive.
Sweden-based Volvo Cars rose 6.9 per cent after posting a 31 per cent rise in sales in May year-on-year.
The Stoxx 600 ended May with declines of over 3 per cent, logging this year’s worst monthly performance as much of the month went by with worries about the US debt ceiling standoff and signs of a global economic slowdown. REUTERS Swiss annual inflation dipped to 2.2% as expected in May, government data showed. The Copenhagen Stock Exchange was closed on Monday for the Constitution Day holiday.
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