ROME: European stocks tracked a slump in Asian markets after Chinese inflation data indicated more weakness in the world’s second-biggest economy.
Equities are falling 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.”
The Stoxx Europe 600 Index dropped 0.6 percent to 356.43 at 9:35 a.m. in London. It pared a drop of as much as 1.1 percent after mining shares erased losses, with Fresnillo Plc and Randgold Resources Ltd. tracking gains in gold and silver prices.
Among stocks moving on corporate news, ASML Holding NV dropped 4.1 percent after Europe’s largest maker of semiconductor equipment projected sales that missed the average analyst estimate. Software AG slid 8.1 percent after cutting its 2015 revenue forecasts.
Skanska AB fell 6.8 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 18 percent after the medical supplies company lowered its annual profitability and sales forecasts because of a slowdown in Asia.
Hargreaves Lansdown Plc jumped 7.2 percent after posting a record number of new active clients and a surge in new business inflows in the first quarter. Deutsche Wohnen AG added 1 percent after Vonovia SE offered to buy the German residential landlord if the latter’s planned acquisition of LEG Immobilien AG fails.
The Stoxx 600 has lost 1.6 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. While March is the first month for which traders expect at least even odds of a liftoff, Fed Vice Chairman Stanley Fischer said over the weekend that there’s still a case for interest rates to rise by the end of the year.
