European Stocks Drop Amid China Data as Glencore Tumbles 29%

  • Miners, automakers decline most among European industry groups
  • Vodafone falls after ending talks with Liberty Global

The optimism that sent European stocks rallying on Friday was short-lived.

The Stoxx Europe 600 Index lost 2.2 percent today as growth concerns resurfaced after Chinese industrial companies reported profits fell the most in at least four years. Commodity producers slumped to their lowest levels since 2009, with a record plunge by Glencore Plc. Automakers, which had their worst week since 2011, fell a further 3.6 percent.

“The economic recovery is turning out to be a bit lackluster,” said Rosamunde Price, who helps oversee about $14 billion as chief investment strategist at Seven Investment Management in London. “People are worrying that global growth may have already passed its peak, plateaued, and is possibly turning down. Markets have just been so volatile, I’d recommend investors to shut up shop -- the best thing now would be a moment of dullness.”

Bullishness swept through European markets on Friday, with the Stoxx 600 rallying 2.8 percent, the most in almost a month, after comments by Federal Reserve Chair Janet Yellen signaled recent market turmoil won’t derail the U.S. recovery. Yet the gains weren’t enough to erase a second consecutive weekly decline. Europe’s benchmark measure has lost 18 percent from this year’s record in April and reached an eight-month low on Thursday.

Concerns over global growth have hit forecasts for corporate profits. Cuts to earnings estimates outnumber increases by the most in three years, and the pessimism could reach levels last seen during the financial crisis, based on an index tracking the changes compiled by Citigroup Inc.

In Spain, where equities entered a bear market last week, the IBEX 35 Index dropped 1.3 percent after earlier rising 0.8 percent. Catalan voters narrowly rejected the regional president’s plan to build an independent state and left him needing a deal with an anti-capitalist party that rejects the rule of law if he wants to govern.

Almost 550 of the Stoxx 600 shares fell. Glencore sank 29 percent and as much as 31 percent as Investec Plc warned that there was little value for shareholders should low commodity prices persist. Volkswagen AG plunged 7.5 percent to its lowest price since 2011, and Porsche Automobil Holding SE, which owns the majority of Volkswagen’s common stock, declined 6.9 percent.

Vodafone Group Plc fell 4.8 percent after saying talks with Liberty Global Plc about a possible exchange of assets have ended.

SBM Offshore NV surged 14 percent after being invited to participate in Brazil’s Petroleo Brasileiro SA tenders. SABMiller Plc gained 1.3 percent on speculation that Anheuser-Busch InBev NV is close to submitting a bid.

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