Europe Stocks Slide Into Bear Market on Growth Worry, Oil Slump

The Stoxx Europe Index Declines 2.5 Percent
  • Stoxx 600 down 20 percent since April high as miners tumble
  • Shares extended drop after U.S. data on retail, manufacturing

European stocks fell to a one-year low, entering a bear market on concern about global growth and deepening losses in oil prices.

The Stoxx Europe 600 Index dropped 2.8 percent to 329.84 at the close, taking its decline since an April record to more than 20 percent. That meets the common definition of a bear market. Shares extended declines after reports showed a worsening in the U.S. economy. 

Concern about the rout in oil and the state of China’s economy has dominated global markets in 2016. Europe’s stock benchmark slid 3.4 percent this week for a third straight loss. Chinese shares fell into a bear market today for the second time in seven months.

“European stocks accelerated losses after U.S. data made market sentiment go from bad to terrible,” said John Plassard, senior equity-sales trader at Mirabaud Securities LLP in Geneva. “One of the main drags on the market today is that oil may close at the lowest in 12 years and in Europe it raises the concern about deflation.”

A measure of commodity producers posted the biggest drop of the 19 industry groups on the Stoxx 600. BHP Billiton Ltd. fell 6.4 percent after saying it expects a $4.9 billion impairment charge on onshore U.S. assets. Energy companies also slid, with Total SA and Royal Dutch Shell Plc pacing declines.

Among stocks moving on corporate news, Volkswagen AG retreated 3.5 percent after data showed the carmaker’s market share in Europe last year fell for the first time since 2007.

Casino Guichard-Perrachon SA rose 4.8 percent after Exane BNP Paribas said the supermarket operator’s planned sale of Big C Supercenter PCL in Thailand would ease investor concerns about its balance sheet.

It’s been a wild ride in the last nine months for the Stoxx 600, with a weak euro and optimism surrounding the European Central Bank’s stimulus plan proving no match for disappointing news out of China. The benchmark fell 9.8 percent in 2016 alone, and only 17 of its 600 shares are trading above their Dec. 31 price. A euro-area gauge of volatility surged 14 percent to a September high this week.

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