Europe stocks fall as China data reignite global growth concern

[FRANKFURT] Banks and commodity producers helped drag European stocks lower as worse-than-expected Chinese import data reignited investor concern about growth prospects in the world's second-biggest economy.

Banks posted the biggest decline on the Stoxx Europe 600 Index, with HSBC Holdings Plc contributing the most to the drop. UBS Group AG lost 1.1 per cent after Switzerland's finance ministry was said to plan requiring the country's biggest banks to have capital equal to about 5 per cent of total assets. Glencore Plc fell 2.6 per cent and Anglo American Plc lost 1.8 per cent. SABMiller Plc jumped 9 per cent after agreeing to a takeover offer from Anheuser-Busch InBev NV, which added 1.7 per cent.

The Stoxx 600 retreated 0.9 per cent to 358.47 at the close of trading. The measure yesterday snapped its longest winning streak since July as commodity producers reversed early gains and ended their longest rally since 2000. Concern about the impact of a slowing Chinese economy on global growth and uncertainty over the timing of a Federal Reserve rate increase spurred the Stoxx 600's worst quarterly drop in four years. Data today showed China's imports plunged in September, extended their longest losing streak in six years. The equity gauge is now down 13 per cent from the year's high reached in April.

"People like to be nervous at the moment because everywhere we look there are risks," said Herbert Perus, head of equities at Raiffeisen Capital Management in Vienna. "The China story has an effect on commodities stocks which have moved a lot in the last two weeks. There is a correction on the indexes and short- term oriented people are forced to sell again and this is why we are down. Banks are one of the largest sectors and when the whole market is sold this sector is one of the hardest hit."

Leoni AG tumbled 34 per cent after the cable company, which supplies to carmakers, said it would miss its 2015 earnings target. Auto-related stocks were among the worst performers on the equity index, with Volkswagen AG sliding 2.1 per cent after announcing a cut in investment spending, while Daimler AG and Continental AG dropped at least 1.3 per cent. AXA SA led insurers lower, falling 1.9 per cent after JPMorgan Chase & Co cuts its rating to neutral from overweight.

Among other stocks moving on corporate news, Royal Mail Plc lost 4.2 per cent after the UK government sold its remaining stake in the company.

SAP SE added 5.4 per cent after posting third-quarter sales and operating profit that beat analysts' estimates. Kuehne & Nagel International AG climbed 1.4 per cent after reporting higher-than forecast third-quarter profit and saying it may beat its full-year margin target.

BLOOMBERG