Portfolio

Europe close: Stocks finish near their session lows

By Alexander Bueso

Date: Thursday 11 Oct 2018

Europe close: Stocks finish near their session lows

(Sharecast News) - Stocks on the Continent finished near their session lows, tracking the big declines seen in Asia overnight, where investors had replicated the losses sustained on Wall Street during the previous session.
Some strategists were clearly worried, cautioning clients to "not buy the dip".

On that note, before the opening bell on Thursday, Barclays's Maneesh Deshpande, wrote: "In our view the two main catalysts behind the current equity selloff were recent commentary by Fed officials on terminal level of rates and by the Trump Administration on US-China trade.

"Fundamentals have not changed but we expect volatility to remain elevated in the short term and do not recommend buying this dip."

At the closing bell, the pan-European Stoxx 600 was down by 1.98% or 7.28 points to 359.65, alongside a fall of 1.48% or 173.15 points to 11,539.35 for the German Dax and the Cac-40 had slid 1.92% or 99.85 points to 5,106.37.

In terms of the market internals, the Stoxx 600's sector gauges for Technology and Basic Resources trimmed earlier losses to finish 1.04% and 0.97% lower, but Oil&Gas did end the session near its worst levels, shedding 3.04% as Brent crude oil futures continued to get hammered.

To take note of, the Technology sector sub-index did finish only marginally above its 52-week lows.

In parallel, the yield on the benchmark 10-year Italian government note climbed six basis points to 3.56%. Similarly-dated French OATs on the other hand were higher, pushing their yields down by two basis points to 0.88%.

Overnight, Tokyo's Nikkei-225 dropped 3.89% to 22,590.86 and the Shanghai Shenzen CSI 300 by 4.80% to 3,124.11.

Thursday's losses came despite a mixed start on Wall Street on the heels of a larger-than-expected slowdown in US consumer prices.

According to the US Department of Labor, the rate of advance in consumer prices in the States slowed from a year-on-year clip of 2.7% in August to 2.3% in September (consensus: 2.4%).

The flow of fresh data on Thursday was otherwise quite thin, with only final readings on consumer prices in France, Spain and Portugal referencing the month of September having been published.

Out of those, the only report that yielded any surprises was Spain's, with the country's national statistics office bumping-up its estimate for the year-on-year rate of change in harmonised CPI from 2.2% to 2.3%.

Meanwhile, in France, INSEE confirmed that its measure of harmonised CPI was ahead by 2.5% last month, as did Portugal's own statistics unit, saying CPI was up at 1.8%.

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