EUROPE MARKETS: European Stocks Hit By Cocktail Of Worries Over Catalonia, China

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Publicis shares under pressure over sales concerns

Continue Reading Below

An escalation of political tensions in Spain, a clutch of disappointing corporate updates and concerns about growth in China prompted investors to yank down European stocks on Thursday.

Where indexes are trading: The Stoxx Europe 600 index fell 0.7% to 389.34. No sector traded higher, and consumer goods and services shares were down the most. The index on Wednesday rose 0.3% (http://www.marketwatch.com/story/dax-heads-for-new-record-as-euro-slide-helps-exporters-2017-10-18).

In Madrid, the IBEX 35 dropped 0.9% to 10,179.60 as the Spanish government said it will move to suspend autonomous rule in the Catalonia region (http://www.marketwatch.com/story/spain-to-trigger-direct-rule-of-catalonia-as-standoff-continues-2017-10-19), after Catalan leaders failed to renounce their push for independence. Among losing shares, Banco de Sabadell SA (SAB.MC) fell 1.7% and Bankia SA (BKIA.MC) gave up 0.8%.

Germany's DAX 30 index fell 0.5% to 12,977.11, pulling back from Wednesday's all-time closing high. France's CAC 40 moved 0.4% lower to 5,361.59.

In London, the FTSE 100 was down 0.3% at 7,521.54, after finishing Wednesday's session not far from the record close logged last week.

Continue Reading Below

Losses in European stocks accelerated after the Hang Seng Index slid 1.9% and . Property stocks on that Hong Kong benchmark came under pressure after housing sales by value (http://www.marketwatch.com/story/china-september-housing-sales-contracts-2017-10-19) in September decreased 2.4% from a year earlier. At the same time, the Shanghai losed 0.3% lower after a report showed China's economic growth slowed (http://www.marketwatch.com/story/china-gdp-growth-slows-in-third-quarter-2017-10-18) in the third quarter.

What strategists are saying:

"Spain has clearly had enough, invoking Article 155, which will be activated at the weekend and will then proceed through its various stages in the Madrid parliament," said Chris Beauchamp, chief market analyst at IG. "The shock news jolted equities out of their lazy drift higher, with a swift drop doubtless shaking a few of the tardy newcomers out of their longs and giving bears something to roar about, even if their moment was brief."

"Following [Chinese] data this morning and confirmation of slowing credit growth this week, our medium-term lead indicators remain firmly negative and we maintain our bearish sector view on the mining equities," said analysts at Liberum.

The Stoxx Europe 600 Basic Resources Index was down 1%.

Stock movers: Shares of Unilever (ULVR.LN) dropped 4.2% after the company behind brands including Ben & Jerry's and Dove reported weaker revenue growth of 2.6% in the third quarter. Analysts had been looking for growth of 3.9%. Sales growth was hurt by poor weather in Europe and natural disasters in the Americas, the consumer products company said.

"There's really no growth in the U.S. business," Unilever Chief Financial Officer Graeme Pitkethly said in an interview (http://www.marketwatch.com/story/unilever-sales-disappoint-on-us-hurricane-impact-2017-10-19). "But the big one-off impact that caused us to miss against consensus this quarter were the hurricanes in Florida and Texas."

Publicis Groupe SA (PUB.FR) tumbled 6.1% in Paris as the world's third-largest advertising group posted third-quarter organic revenue that fell short of analyst expectations (http://www.marketwatch.com/story/publicis-shares-fall-5-on-disappointing-revenue-2017-10-19).

IWG PLC (IWG.LN) plunged 33%, after the workspace provider said an anticipated improvement in third-quarter sales has been weaker than expected.

Travis Perkins PLC shares (TPK.LN) were up 2.6% after the building materials supplier said third-quarter comparable sales rose (http://www.marketwatch.com/story/travis-perkins-sales-up-business-on-track-2017-10-19) and that it expects to meet its full-year expectations.

Economic data: U.K. retail sales fell month-over-month in September by 0.8% (http://www.marketwatch.com/story/uk-retail-sales-disappoint-with-drop-of-08-2017-10-19), nearly erasing August's 0.9% rate of growth. Economists polled by The Wall Street Journal predicted no change in the volume of sales.

(END) Dow Jones Newswires

October 19, 2017 05:37 ET (09:37 GMT)