EUROPE MARKETS: European Markets Drop, As Gloom Spreads To Online Retailers
18 December 2018 - 01:52AM
Dow Jones News
By Emily Horton
H&M tumbles 9% as retailer take a hit
European markets fell Monday, as investors cautiously approached
the final full week of trading in 2018 ahead of the Christmas break
and retailers crumbled after a London-based company warned on
profits..
Drug and bank stocks also fell, while mining stocks provided
some support for the main index.
How are markets trading?
The Stoxx Europe 600 fell 0.9% to 343.87, after ending last week
up 0.5%.
Germany's DAX 30 fell 1.1% to 10,744.94, and Italy's FTSE MIB
Italy index fell 0.8% to 18,753.14. While France's CAC shed 0.5% to
4,827.16 and the U.K.'s FTSE 100 declined 0.8% to 6,791.98, after
finishing up 1% last week.
Losses were modest for Spain's IBEX 35 index , which slipped
0.4% to 8,852.80.
The euro was up to $1.1378, from $1.1309 late on Friday. The
pound was up against the dollar at $1.2613 on Monday, from $1.2583
late Friday in New York.
What is driving the markets?
The retail sector was under pressure in Europe after online
clothing group ASOS PLC (ASC.LN) plunged 40% after cutting its
sales growth and profit margins forecast
(http://www.marketwatch.com/story/asos-profit-warning-sends-shares-of-rivals-lower-2018-12-17-44852948).
The company, which lists on London's Alternative Investment Market
of smaller companies, cited poor November sales with sharply
falling margins for the warning.
Central banks will be in focus this week with a Federal Open
Market Committee meeting and expected interest-rate hike on
Wednesday, and the Bank of England due to meet Thursday, though the
latter isn't expected to announce any changes to interest rates
given the uncertainty surrounding Brexit. U.K. Prime Minister
Theresa May is reportedly trying to rule out the idea of a second
referendum over Brexit, as she struggles to keep her exit deal
alive.
Investors will be watching to see if global equities can recover
from Friday's beat down, which saw the Dow log its lowest close
since May 3. But U.S. stocks were weaker in early action on Monday
(http://www.marketwatch.com/story/stock-market-poised-to-edge-lower-in-the-wake-of-worst-start-to-december-since-1980-2018-12-17).
What stocks are active?
Mining heavy-weights were among the biggest gainers on Monday,
with BHP Group PLC (BHP.LN) up over 3% after the company said it
purchased 5% of its stock
(http://www.marketwatch.com/story/bhp-buys-back-52-billion-in-stock-2018-12-16)
in $5.2 billion buyback funded by the sale of its U.S. shale unit.
Glencore PLC (GLEN.LN) rose by 1%, Rio Tinto PLC (RIO.LN) climbed
almost 2% and Anglo America PLC (AAL.LN) grew by 0.6%.
Swedish fashion retailer Hennes & Mauritz AB (HM-B.SK) slid
9% after it reported fourth-quarter sales grew in line with
expectations
(http://www.marketwatch.com/story/hms-sales-rise-in-line-with-estimates-2018-12-17).
Other retailers were down as well on Monday, with Marks and Spencer
Group PLC (MKS.LN) and Next PLC (NXT.LN) both losing 4% and Adidas
AG (ADS.XE) falling by over 3%.
News that online fashion retailer ASOS (ASC.LN) warned of
difficult November trading
(http://www.marketwatch.com/story/asos-profit-warning-sends-shares-of-rivals-lower-2018-12-17-44852948)
and cut its full-year outlook, leaving shares down 40%, shook the
sector.
(http://www.marketwatch.com/story/tui-net-profit-up-14-upbeat-on-winter-period-2018-12-13)
(http://www.marketwatch.com/story/tui-net-profit-up-14-upbeat-on-winter-period-2018-12-13)
(END) Dow Jones Newswires
December 17, 2018 09:37 ET (14:37 GMT)
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