European Stocks Fall for Second Day as Growth Concern Persists

  • Health-care shares contribute most to Stoxx 600 decline
  • Glencore rebounds after saying its finances are robust

European stocks deepened losses today, signaling investor worry over global growth hasn’t abated.

Concern over a slowdown in Asia and uncertainty over the Federal Reserve’s actions is weighing on shares, boosting volatility. A gauge measuring swings on euro-area stocks is at its highest level since 2011 on a monthly basis, data compiled by Bloomberg show.

The Stoxx Europe 600 Index dropped 0.7 percent to 339.23 at the close of trading, after briefly reversing a decline of as much as 1.8 percent earlier. The benchmark gauge pared some losses after a report showed U.S. consumer confidence rose more than forecast in September.

“The greater macro uncertainty led by, but not exclusive to, China has really spooked investors,” said James Buckley, a portfolio manager at Baring Asset Management in London. “The Fed doesn’t feel able to raise rates yet and there are concerns over whether Europe will be able to continue its very gradual recovery. We will soon be getting into earnings season which focuses more on the micro. I suspect we may have seen the worst of the selling.”

The Stoxx 600 has fallen 11 percent in the third quarter, heading for its worst performance in four years. It’s also poised for its first back-to-back monthly drop in more than a year. The volume of shares changing hands on the gauge today was 32 percent higher than the 30-day average, data compiled by Bloomberg show.

Drugmakers were the biggest drag on the Stoxx 600 among industry groups, with Novo Nordisk A/S down 3.4 percent and Hikma Pharmaceuticals Plc tumbling 8.1 percent.

Glencore Rally

Glencore Plc rebounded 17 percent after saying it has no solvency issues and its business remains financially robust. The mining and trading company tumbled 29 percent yesterday amid concern it had too much debt to withstand a drop in commodities. A gauge of miners rose from its lowest level since 2009.

SABMiller Plc climbed 1.8 percent after people familiar with the matter said Anheuser-Busch InBev NV is lining up banks to arrange as much as $70 billion in financing as it prepares to make a takeover bid for the brewer. AB InBev briefly pared some losses, before closing 2.8 percent lower.

Among other stocks active on corporate news, Wolseley Plc plunged 13 percent after it forecast North American industrial markets will be challenging, and the U.K. heating industry will remain competitive.

RWE AG rallied 5.8 percent after Westdeutsche Allgemeine cited an ally of German Chancellor Angela Merkel as saying the state of North Rhine-Westphalia should support the power company in dealing with the country’s energy shift.

Continental AG climbed 2.5 percent after Goldman Sachs Group Inc. added the stock to its conviction buy list, saying it’s a beneficiary of the focus on emission standards after Volkwagen AG’s diesel scandal.

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