European stocks tumbled to the lowest in six weeks as global risk-off sentiment swelled on concerns over a more aggressive US Federal Reserve and the spread of Covid in China, outweighing optimism over French president Emmanuel Macron’s election victory. US stocks pared losses ahead of a busy week for Big Tech earnings.
The Iseq index in Dublin fell by more than 1.5 per cent, with banks prominent among the big stocks leading the fall.
AIB finished the session down almost 2.9 per cent to €2.02, while Bank of Ireland was down by 1.1 per cent to €6.69. Financial services stocks struggled across Europe on macroeconomic worries.
Commodity stocks and banks led a near 2 per cent drop in London’s FTSE 100 on Monday as fears of a global economic slowdown sapped sentiment. The domestically-focused mid-cap FTSE 250 index ended down 1.4 per cent after hitting its lowest level since March 16th.
Oil majors BP and Shell lost 6.2 per cent and 5.2 per cent respectively, and the industrial mining sub-index sank 5.6 per cent on worries that prolonged Covid-19 lockdowns in China would weigh on demand for metals and crude oil.
Banks dropped 3.2 per cent, with Asia-focused lenders HSBC Holdings and Standard Chartered slipping ahead of their results this week.
McColl’s Retail Group slumped 53.1 per cent as the British convenience store chain forecast tepid annual core profit after a weaker-than-expected Easter performance, dented by lower consumer spending and supply chain disruptions. The troubled retailer said that it is in rescue talks with banks and lenders to get more money through the door, but that funding would likely wipe out most of the value of shares.
Activist investor Cat Rock Capital has encouraged Just Eat Takeaway. com shareholders to vote the company’s finance boss off the board next week. Cat Rock owns a nearly 7 per cent stake in the business. Shares rose 0.6 per cent.
The Stoxx 600 Europe Index fell 1.8 per cent by the close, the lowest since March 15th. China-exposed sectors such as miners, oil and gas and luxury stocks were among the top decliners as fears grew that Beijing was on the verge of joining Shanghai in pandemic-related lockdowns.
Miners marked their worst session in two years as industrial metal prices slumped on concerns about waning demand from the top metals consumer, while oil and gas stocks dropped 4.8 per cent. The bank index lost 3 per cent.
France’s CAC 40 dropped 2 per cent, caught in a wider risk-off move, even as Sunday’s election results showed pro-EU centrist Emmanuel Macron beating far-right challenger Marine Le Pen with a solid margin.
Royal Philips NV’s shares slumped 11 per cent to the lowest since 2016 after operating profit missed analyst estimates as the Dutch maker of medical gear warned of persistent supply-chain challenges and said inflationary pressures may stick around for years.
All the major S&P sectors fell, with energy stocks tumbling 5.6 per cent as Brent crude prices dropped almost 5 per cent toward $100 a barrel. Oil majors Chevron and ExxonMobil fell more than 4 per cent each, while oilfield services companies Schlumberger and Halliburton dropped nearly 9 per cent each.
Other economy-sensitive sectors such as materials, financials and industrials also took a hit, falling close to 2 per cent.
Twitter rose 3.9 per cent after sources told Reuters it was set to accept Tesla Inc chief Elon Musk’s “best and final” offer of $54.20 per share in cash.
Silicon Motion Technology jumped 10.2 per cent after a report said the chipmaker is exploring a sale.
(Additional reporting: Bloomberg/Reuters/PA)