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)

Copyright (c) 2018 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Feb 2024 to Mar 2024 Click Here for more FTSE 100 Charts.
FTSE 100
Index Chart
From Mar 2023 to Mar 2024 Click Here for more FTSE 100 Charts.