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European shares fall as Italian, China worries weigh on sentiment

Ilona Billington
  • October 8th 2018, 13:39
  • Last Updated: October 17th 2019, 11:23

European shares have started the week in negative territory, as a number of details work to sink sentiment and keep prices in the red. The downbeat tone was set by a weak performance in China overnight.

That was exacerbated by the ongoing disagreement between the EU and Italy over its budget plans. A disappointing German industrial output number, added to the gloom.

By around 1330 BST, the EUROSTOXX 600 was down 0.93%, while the EUROTOXX 50 lost 0.85%. Meanwhile, the German DAX fell 0.88%, the French CAC was 0.98% in the red, the Spanish IBEX was 0.65% lower and the Italian MIB was 2.41% in negative territory.

Europe stocks retain negative bias

As in last week, the Italian Government’s budget plans are weighing on sentiment and the broader European indices. The latest development has seen the EU repeat its concerns over the planned Italian budget, adding that it would propose changes, where necessary.

However, Italy confirmed that it planned ‘no retreat’ from its current spending plans to help boost the economy.

That weighed further on Italian banks stocks:

  • Intesa Sanpaolo shares sank 3.24% to €2.02.
  • Banco BPM shares lost 5.37% to trade at €1.87.
  • UniCredit shares fell 4.04% to €11.91.

Fears that the US-China trade dispute could have a bigger hit on China that previously thought, also hurt. The People’s Bank of China said it would lower the level of cash reserves Chinese banks need to hold, to help limit the potential impact of higher and more US import tariffs on its goods.

Other stock movers

Aside from the details above, there were other stock movers of interest, Monday.

H&M shares were 0.47% higher at SEK169.78 following news the Swedish fast fashion retailer had purchased a stake in financial services firm, Klarna. The deal will also see shoppers able to make payments in the same way across all of H&M’s platforms, as well as enjoy a try-before-you-buy online service.

Meanwhile, Deutsche Telekom shares slipped 0.07% as it announced a partnership with Telefonica Deutschland that would pair at least 5,000 of the latter’s mobile masts with Deutsche Telekom’s fibre optic infrastructure.

About the author

Ilona Billington
Ilona is a freelance writer and editor with over 15 years experience reporting and writing about UK and European economics, real estate, financial markets and central banks.

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