Global growth concerns drag down European shares

European shares fell to a three-month closing low on Friday and posted their sixth week of losses after downbeat Chinese trade data stoked concerns about the outlook for global growth and company earnings. Fears of a slowdown in global growth were sparked after China's export data came in just short of analysts' expectations, with mining stocks in particular hit by concerns over a weakening outlook for raw materials.
The pan-European FTSEurofirst 300 index of top shares closed down 1.4 percent at 1,089.55 points, and fell 1.9 percent for the week, with volume at 91.4 percent of its 90-day average. "Markets are not very happy and it is all to do with the loss of momentum in the global economy, and the extent to which that might translate into a loss of earnings," Mike Lenhoff, chief strategist at Brewin Dolphin, said.
The mining sector was one of the major market drags, tracking metal prices lower after the Chinese trade data, with the STOXX Europe 600 Basic Resources index shedding 2.1 percent. Kazakh miner ENRC was one of the worst performers in the sector, falling 7.5 percent after a source said a third independent director was considering quitting.
Oil stocks also featured heavily on the downside, tracking a sharp drop in crude after news Saudi Arabia would offer more of the commodity to Asian customers. The STOXX Europe 600 Oil & Gas index was down 1.5 percent. The Euro STOXX 50 volatility index, one of Europe's main fear gauges, rose nearly 8 percent to a one-week high, signalling a rise in investor aversion to risk.
Nomura said fund investors globally for the week June 2-8, turned sellers, with net outflow of $7.2 billion in equities, after moderate net inflow of $1.8 billion the previous week. There was strong selling interest in French luxury group Hermes, which fell 4.8 percent on volume at 268.8 percent of its 90-day average, after LVMH denied speculation it was planning a take-over bid for its smaller peer. Overall trading in the market was choppy, and stocks briefly pared early session losses after the German parliament backed additional aid to Greece, with Finance Minister Wolfgang Schaeuble saying that private creditors would share the costs.