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European stocks declined, snapping a four-day rally in the benchmark Stoxx Europe 600 Index, as China’s manufacturing contracted in November adding to concern global economic growth is slowing down.
China’s manufacturing recorded the weakest performance since the global recession eased in 2009, underscoring the case for monetary stimulus. A purchasing managers’ index compiled by the China Federation of Logistics and Purchasing slid to 49 in November, lower than all but two of 18 forecasts in a Bloomberg News survey. Readings below 50 signal a contraction.
Spain sold the maximum amount of debt planned at an auction. France sold 4.3 billion euros of securities, compared with a maximum 4.5 billion euros of debt available on offer as 10-year bonds sold were priced to yield 3.18 percent, less than at a previous auction on Nov. 3.
National benchmark equity indexes declined in every western-European market except Switzerland. The U.K.’s FTSE 100 Index dropped 0.3 percent, France’s CAC 40 Index fell 0.8 percent and Germany’s DAX Index fell 0.9 percent.
BNP Paribas SA and Societe Generale SA, the biggest French lenders, declined 2 percent to 28.88 euros and 3.2 percent to 17.50 euros, respectively. Goldman’s Chief Global Equity Strategist Peter Oppenheimer cut the European banking sector to ’underweight’ from ’sell’ as he expects sector to remain under pressure to shore up balance sheets.
Hochtief fell 1.5 percent to 41.78 euros and Vinci SA (DG), Europe’s biggest builder, slipped 2 percent to 32.44 euros. Vinci pulled out of bidding for the purchase of Hochtief’s airport-operating business, Societe Generale said in a research note today, citing Vinci’s chief financial officer.
Norsk Hydro, Europe’s third-largest aluminum maker, fell 2.9 percent to 26.86 kroner after forecasting lower global growth in demand for the metal. Goldman Sachs recommended selling the shares on low returns and near-term weakness.
Burberry Group Plc, the U.K.’s largest luxury-goods maker, rallied 3 percent to 1,308 pence. The company plans to add more stores in Paris after its opening on rue Saint Honore, Les Echos reported, citing Chief Executive Officer Angela Ahrendts.
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