European stock selloff intensifies amid global growth concern
By Bloomberg
Mounting concern that global growth is weakening and uncertainty about the timing of a U.S. rate increase fueled a second day of losses for European stocks.
A respite for the region’s equities at the start of the week was short lived, with the rout in emerging markets spurring deeper declines. The U.K.’s FTSE 100 Index headed for a 10 percent slump from its record, a level known as a correction. Kazakhstan was the latest to devalue its currency, following a similar move by China last week.
“It’s a combination of factors that are taking down stocks: Chinese growth slowing down, China’s market crash, the oil selloff and fears of all this spreading to the U.S. and Europe,” said Ion-Marc Valahu, co-founder and fund manager at Clairinvest in Geneva.
The Stoxx Europe 600 Index lost 1.1 percent to 377.09 at 11:35 a.m. in London, taking its decline since China’s currency move to 5.7 percent.
The market is seeing increased volatility as investors assess the timing of a U.S. rate increase. Minutes from the Federal Reserve’s July meeting, held before the yuan devaluation, shed no further light on whether officials will act in September.
“Delaying an interest-rate hike only creates volatility,” Valahu said.
Miners Rebound
The sole bright spot today? Miners climbed for the first time in eight days, the only industry group to gain. Kaz Minerals Plc, which has 60 percent of its costs denominated in the Kazakh tenge, said it will benefit from the currency’s decline.
The rise in gold prices also pushed shares of the metal’s miners up. Polyus Gold International Ltd. rose 2.9 percent after saying first-half earnings jumped 50 percent.
Germany has been among the markets most hurt in the recent selloff as its exporters tumbled. The DAX Index fell 0.8 percent today, heading for a seven-month low.
Gamesa Corp. and Vestas Wind Systems A/S slid 4.9 percent or more after Credit Suisse Group AG downgraded the wind-turbine makers, citing downside risks. Gamesa’s key emerging markets may not see further improvement, the bank said.
Royal Ahold NV climbed 3.6 percent after the Dutch grocery chain reported quarterly profit that topped analysts’ estimates. Delhaize Group, which is merging with Ahold, added 3.1 percent. Boskalis Westminster NV jumped 9.1 percent after first-half earnings beat projections.