Europe Stocks Drop as Traders Return to Market Amid China Rout

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Europe Stocks Drop as Traders Return to Market Amid China Rout

12:42 CAT | 04 Jan 2016

Bloomberg

European stocks fell after a rout in Chinese equities rekindled concern that the nation’s economic slowdown will hamper the global recovery.

In the first trading day of the year, the Stoxx Europe 600 Index lost 1.8 percent by 8:05 a.m. in London, with automakers and miners leading slides among industry groups. China’s CSI 300 Index tumbled 7 percent, triggering circuit breakers that halted trading for the rest of the day.

The rout is coming after European shares completed a fourth straight year of advances, with the Stoxx 600 climbing 6.8 percent to beat global equities and the Standard & Poor’s 500 Index. Investors, options traders and strategists alike are all bullish on Europe’s stocks, sending money to funds tracking them and betting on a 13 percent jump in the gauge in 2016 amid European Central Bank stimulus.

Continental AG declined 2.9 percent. The tiremaker may lose sales because of the emissions scandal at its customer Volkswagen AG last year, its chief executive officer told German newspaper Boersen-Zeitung. Daimler AG lost 3.5 percent after its chief financial officer said it won’t spin off its commercial-vehicles unit, according to Boerse-Online.

Shire Plc dropped 3.5 percent as people familiar with the matter said the drugmaker is in advanced talks to acquire Baxalta Inc. for about $32 billion.

Source: Bloomberg