MILAN: European shares fell on Thursday as weak U.S. data fed concerns that the world's biggest economy may be slowing down, with export-oriented auto stocks leading the decline and Credit Suisse tumbling after reporting a full-year loss.
Losses, however, were limited by a rally in commodities which lifted miners and oil sector stocks.
U.S. non-farm productivity slumped in the fourth quarter and jobless claims rose more than expected, data showed. That put added pressure on the dollar, which has been weakening as expectations for more U.S. interest rate hikes this year fade.
"The dollar is weakening because the market is starting to worry that the strength of the internal labour market may not be enough to contain the headwinds," said Marco Vailati, head of research at Cassa Lombarda. "What's needed are strong data that pour cold water on mounting expectations for a slowdown".
The pan-European FTSEurofirst 300 index ended down 0.15 percent after a choppy day, while the STOXX 600 index fell by 0.2 percent to 328.8 points. Swiss bank UBS cut its year-end target for the STOXX 600 by 8 percent to 400 points.
Credit Suisse slumped 10.9 percent, the biggest loss in the FTSEurofirst 300 index. The bank posted its first full-year loss since 2008 after it booked a big impairment charge for its investment banking business under new Chief Executive Tidjane Thiam.
Export-oriented auto stocks fell 2.7 percent, making them the second biggest sectoral faller. Daimler fell 3.2 percent after the German car maker predicted only modest growth this year after big increases in 2015, held back by higher investment and slower sales growth for its Mercedes-Benz cars in China.
On the other hand, miners and oil and gas stocks surged 7.3 percent and 3.3 percent respectively, as the decline in the U.S. dollar made dollar-priced crude oil and metals cheaper for those using other currencies. The mining index staged its best one-day gain since September 2011.
Royal Dutch Shell, Europe's largest oil company, rose 6 percent, in line with other commodities stocks, despite reporting its lowest annual income in at least 13 years.
ING jumped 8.9 percent, the biggest gainer in the pan-European FTSEurofirst 300 index. The Netherlands' largest bank reported better-than-expected fourth-quarter earnings and played down its oil exposure.
AstraZeneca slumped 6 percent after warning that revenue and earnings would drop this year due to the arrival of cheap generic rivals to its top-selling cholesterol drug.
Of the companies on the STOXX 600 that have reported fourth-quarter earnings so far, 52 percent have met or exceeded expectations and 48 percent have fallen short, according to Thomson Reuters StarMine data.
Comments
Comments are closed for this article.