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Europe close: Stocks slip amid Chinese regulatory worries

By Alexander Bueso

Date: Tuesday 27 Jul 2021

Europe close: Stocks slip amid Chinese regulatory worries

(Sharecast News) - European stocks were still lower as sharp falls in Hong Kong and Shanghai-listed stocks dragged on investor sentiment around the world.
So did downbeat news from Reckitt Benckiser and MorphoSys, even as financial markets waited on the US central bank's policy announcement the next day.

Financial markets were also awaiting the latest quarterly results from US tech giants Apple and Microsoft that were due out after the close of trading on Tuesday.

The pan-European Stoxx 600 index fell 0.52% to 458.76, alongside a 0.62% drop for Germany's Dax to 15,521.84, while Milan's FTSE Mibtel gave back 0.83% to 25,085.46.

Fears of stricter regulation of China's heavyweight technology sector have fuelled a selloff in global markets this week, despite optimism about US and European earnings season as a measure of progress from the Covid pandemic.

"The clampdown on various sectors within the Chinese economy that rely on overseas investment has seen a flight of capital out of Chinese stocks, particularly those with overseas listings, raising concerns as to what other sectors might be next," said CMC Markets analyst Michael Hewson.

In equity news Lysol maker Reckitt tumbled 8.43% as easing demand for its soaps and cold remedies led the company to miss analysts' estimates for quarterly sales.

Dutch tech investor Prosus, which has a stake in China tech giant Tencent, slumped 7%, hitting new lows since May 2020, weighed down by the selloff in Hong Kong and mainland China shares.

German biotech firm Morphosys slid 9% after cutting its revenue guidance for 2021.

French payments firm Worldline also slumped 9% after the company missed half-year operating earnings expectations and investors were disappointed it had not benefited more from shop reopenings after lockdowns.

Shares in Croda International topped the Stoxx 600 with a gain of 6% as the speciality chemicals company said it expected annual profit to be well ahead of expectations after reporting record results for the first half.

French software company Dassault Systemes edged up 1% after it raised its 2021 forecasts on the back of strong momentum across its businesses.


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