European Equities Decline in Thin Trading as Respite Is Brief

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European stocks fell for the fifth time in six sessions on thin trading volume, with geopolitics in focus after North Korea said it successfully test-fired an intercontinental ballistic missile.

The Stoxx Europe 600 Index fell 0.3 percent at the close, extending declines in the final minutes of trading with HSBC Holdings Plc contributing the most to point losses. The volume of shares traded was almost a third lower than the 30-day average, with U.S. markets closed for a holiday. Telecommunications, the worst performing sector in the past month, led decliners.

With the earnings season set to kick off this month, analysts have started lowering their expectations for corporate earnings both in Europe and globally. Gains in macroeconomic data may be peaking, according to JPMorgan Chase & Co. strategists.

  • North Korea’s move risks an escalation with the state’s neighbors and the U.S. over its weapons program. The missile launch precedes a planned meeting this week between U.S. President Donald Trump and Chinese counterpart Xi Jinping at the Group of 20 summit in Germany.
  • This year, Stoxx 600 members are set to spend about 19.5 million euros ($22 million) per index share on average to renew old equipment and build factories, a sum not seen since the global financial crisis, as company chiefs show confidence in the region’s improving economy and more stable political landscape.
  • Among stocks moving on corporate news, Worldpay Group Plc soared 28 percent after saying it received preliminary takeover approaches from Vantiv Inc. and JPMorgan Chase & Co. The U.K. payment-processing company only listed in London two years ago.
    • Clariant AG climbed after its planned $6.4 billion takeover of Huntsman Corp. came under attack by two U.S. investors who are pushing the Swiss chemicals maker to explore alternatives to the six-week-old transatlantic deal.

— With assistance by Blaise Robinson

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