ROME: European stocks were sharply lower on Wednesday, as the devaluation of the yuan by the Chinese government sent global equities broadly lower for a second consecutive day.
During European morning trade, the EURO STOXX 50 tumbled 1.88%, France’s CAC 40 plunged 1.83%, while Germany’s DAX 30 plummeted 1.97%.
European equities remained under pressure after China devalued its currency on Tuesday, in an attempt to help exporters after a recent spate of disappointing economic data.
The central bank described it as a “one-off depreciation” of nearly 2%, based on a new way of managing the exchange rate that better reflected market forces.
Earlier Wednesday, data showed that China’s industrial production increased at by an annual rate of 6.0% in July, confounding expectations for a 6.6% gain.
Markets were also jittery after Ukraine on Monday accused rebels of carrying out the heaviest artillery attacks since a ceasefire was agreed between Kiev and Russia.
Financial stocks were broadly lower, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) tumbled 1.48% and 1.58%, while Germany’s Deutsche Bank (XETRA:DBKGn) and Commerzbank (XETRA:CBKG) lost 1.49% and 1.74%.
Among peripheral lenders, Italy’s Unicredit (MILAN:CRDI) and Intesa Sanpaolo (MILAN:ISP) plummeted 1.39% and 1.62% respectively, while Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) retreated 1.40% and 1.79%.
Elsewhere, German consumer goods group Henkel AG (XETRA:HNKG_p) plunged 6.02% after reporting a 14% second quarter rise in core profit.
German utility E.ON SE NA (XETRA:EONGn) said that first half earnings dropped 13%, sending shares down 0.45%.
