Europe Stocks Drop 3rd Day After China Data Deepens Growth Worry

The Stoxx Europe 600 Index Falls 0.7 Percent
  • ASML falls after sales forecast misses analyst estimates
  • Hargreaves Lansdown rises on record new active clients

European stocks fell, posting their longest losing streak in a month, after Chinese inflation data indicated more weakness in the world’s second-biggest economy.

Equities are dropping this week, after rallying to a one-month high on Friday, as disappointing economic reports in China reignited global growth concerns. Data today showed the country’s consumer inflation moderated and factory gate deflation extended a record stretch of declines.

“We may have had a bit of a rebound last week but investors are still on edge,” said Markus Wallner, an equity strategist at Commerzbank AG in Frankfurt. “The problem is trying to figure out how much slowing demand from China will hurt the global economy. Earnings estimates will continue to go down. Any rally towards the end of the year would come from China’s government doing more to stimulate the economy.”

Stocks rallied for six days before resuming declines this week
Stocks rallied for six days before resuming declines this week

The Stoxx Europe 600 Index dropped 0.7 percent to 355.81 at the close of trading. The benchmark gauge briefly erased losses of as much as 1.1 percent before resuming declines.

Commodity producers rebounded from a two-day drop, moderating the Stoxx 600’s decline. Glencore Plc and Antofagasta Plc added 1.7 percent or more, tracking gains in metal prices amid a weakening dollar.

Among stocks moving on corporate news, ASML Holding NV dropped 4.4 percent after Europe’s largest maker of semiconductor equipment projected sales that missed the average analyst estimate. Software AG slid 6.8 percent after cutting its 2015 revenue forecasts.

Skanska AB fell 8.9 percent after saying it will book a 630 million-kronor ($78 million) writedown because of higher costs from U.S. building projects. Draegerwerk AG tumbled 19 percent, the most since 1999, after the medical supplies company lowered its annual profitability and sales forecasts because of a slowdown in Asia.

Hargreaves Lansdown Plc jumped 3.7 percent after posting a record number of new active clients and a surge in new business inflows in the first quarter.

The Stoxx 600 has lost 1.9 percent after capping its longest stretch of gains since July amid a rally in commodity producers and bets that the Federal Reserve won’t rush to raise rates.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE