You are here
European stocks fail to rebound in worst week since Feb
[LONDON] European stocks failed to stage a recovery on Friday, posting their worst week since a market correction last February as a new sell-off hit bourses across the globe, amid worries about protectionism and fast-rising US interest rates.
Euro zone stocks initially jumped one per cent but rapidly shed all of their gains despite Wall Street opening higher.
All major bourses closed in negative territory and the main regional index ended the day down 0.2 per cent and on a weekly loss of 4.8 per cent.
That's just below the 5.1 per cent fall back experienced last February when a sudden scare about rising inflation and interest rates caused a global market correction.
There's "a rotten trend" in Europe, a trader complained, noting that US shares have outperformed their European peers since the beginning of the year with the Trump administration's fiscal cuts boosting earnings.
Europe lags far behind the United States in terms of earnings growth, and stronger results will be critical in luring back some of the billions that have been pulled out of European stocks this year.
Third-quarter results are beginning to trickle in from European firms as Wall Street banks formally kicked off the earnings season.
Tech stocks - the worst hit by this week's sudden drop - made a modest comeback, up 0.5 per cent, along with the growth-sensitive autos sector
Dutch biotech Argenx rose 5.7 per cent after a positive note from broker Piper Jaffray.
Gucci owner Kering was up two per cent. The recovery comes after investors sold the sector earlier this week due to its big exposure to Chinese consumers amid fears about slowing growth in the world's second biggest economy.
"The recent derating appears overdone," wrote Credit Suisse analysts. "We see a repeat of the 2013-15 scenario as unlikely... The luxury sector has become less reliant on China to grow."
Broker notes also moved some stocks.
Online retailer Zalando gained 2.6 per cent, and Asos rose 4 per cent after Credit Suisse analysts said they were confident that in Europe retail brands preferred the two firms' platforms to Amazon.