ROME: European stock markets have closed down as traders reacted to weak eurozone data and lingering concerns over China.
Equities are being weighed down by a slump in commodity prices caused largely by weaker Chinese demand. Additional downward pressure is coming from increased expectations of a long-awaited US rate hike in December.
With oil diving to a two-month low and commodity markets continuing to be buffeted, Craig Erlam, senior market analyst at Oanda trading group, on Friday said: “It’s worth noting that the market was primed for some form of correction following a good five weeks for investors.”
That correction has been steep for some, amid disappointing company earnings not least for British aircraft engines maker Rolls-Royce and German energy giant E.ON.
Troubled mining giant Glencore has similarly been buffeted amid a sell-off in metals and fears over China.
Friday saw it shed 3.0 per cent, lifting weekly losses to 20 per cent.
At the close, London’s benchmark FTSE 100 index had lost 1.0 per cent across Friday’s session.
In the eurozone, Frankfurt’s DAX 30 index ended off 0.7 per cent and the Paris CAC 40 also ended down 1.0 per cent.
The FTSE and CAC both had ended Thursday’s sessions with losses of almost 2.0 per cent.
Growth in the 19-nation eurozone slowed to 0.3 per cent in the third quarter, official data showed on Friday, with the economy in powerhouse Germany cooling as France returned to expansion.
Bailed-out Greece meanwhile contracted sharply by 0.5 per cent in the third quarter as capital controls this summer threw the economy into disarray.
Worryingly as well, the economy in recovery standout Portugal slowed to a standstill as domestic demand fell sharply.
“Slower eurozone GDP growth … will intensify already strong belief that the ECB will deliver more stimulus at its December policy meeting,” said Howard Archer, chief European economist at research group IHS Global Insight.
