Let’s start the analysis for Europe:
Luxury stocks and travel declines the most H&M falls after disappointing results UK inflation soars to its highest level in 9 years
By Sruthi Shankar
Sept. 15 (.) – European stocks fell on Wednesday on concerns about the slowdown in the Chinese economy, declines in luxury and travel stocks and rising inflation in the UK, which held back prices. main indices under pressure.
The benchmark STOXX 600 index was down 0.1% in morning trading, and 2% from the record reached in mid-August.
Asian stocks were hit by data showing China’s industrial and retail sectors weakened in August, with production and sales growth reaching their lowest level in a year, following new coronavirus outbreaks and supply interruptions.
Retail and travel and leisure stocks fell the most in Europe, down almost 1%, due to concerns about the new COVID-19 outbreak in China’s Fujian province and signs of a tightening of the regulations in Macau, the world’s largest gaming center.
French luxury goods makers LVMH and Kering fell more than 3%.
“China is doing a real review of everything right now. If you look at the sector that has been hit today, it would be the Macau casinos, ”said Keith Termperton, a sales trader at Forte Securities.
“That has a knock-on effect on sentiment. If you take Macau into account, that has had an impact on the luxury goods sector in Europe. ‘ The retail sales figures in China were also quite weak. ‘
Although optimism remains on the European economic recovery, the STOXX 600 is on track to end its seven-month winning streak in September as investors increasingly concerned about global growth and the outlook for monetary policy. .
The UK’s FTSE 100 fell and mid-caps fell 0.3% after data showed UK inflation hit a more than nine-year high last month.
Fashion retailer H&M fell 2.8% as quarterly sales rose less than expected, while Inditex, which owns Zara, fell 1%, although sales approached pre-pandemic levels.
Swedish Match rose 3.4% after the maker of tobacco and nicotine products disclosed its plans to spin off its US cigar business to shareholders and go public.
Dutch online food delivery company Just Eat Takeaway fell 4.0% after the Financial Times reported that British rival Deliveroo and Amazon will offer free deliveries to Prime subscribers. Deliveroo gained 0.9%.
Oil stocks gained the most as crude prices rose after industry data showed a larger-than-expected reduction in crude stocks in the United States. (Information from Sruthi Shankar in Bengaluru; Edited by Shounak Dasgupta) Translate serenitymarkets
Global market analysis
China’s growth weakened sharply in August Oil wins, gold holds Conflicting data on inflation in the UK and the US fuels debate Fall in casinos hurts Hong Kong stocks
By Huw Jones
LONDON, Sept 15 (.) – Global stocks fell on Wednesday as weaker-than-expected Chinese data cast a shadow over the economic recovery and a rebound in prices in the UK fueled the heated debate over the staying power of inflation.
The STOXX index of 600 European companies lost 0.16%, away from its all-time high in mid-August. The MSCI All Country World Index was down 0.18%.
“The weak data on retail sales in China is a surprise and shows that unless the Delta variant is controlled, any recovery is going to be difficult,” said Michael Hewson, chief market analyst at CMC Markets.
“There is a slow realization that perhaps we have seen the peak of economic growth, certainly the rebound of the summer is over,” Hewson said.
Data from China showed that growth in its factories and the retail sector continued to be weak in August, with production and sales growth reaching year-long lows, as new coronavirus outbreaks and supply disruptions threatened its economic recovery.
For its part, inflation in the United Kingdom reached its highest level in nine years last month, after registering the largest monthly increase in the annual rate in at least 24 years, although it was largely due to a one-off impulse that, according to analysts, it is probably temporary.
UK data contrasted with US figures on Tuesday, which showed that the Consumer Price Index (CPI) in August posted its smallest gain in six months, suggesting that inflation has likely peaked, aligning with Fed Chairman Jerome Powell’s long-standing belief that high inflation is transitory.
Lower inflation suggests that the Fed will be less pressured to start cutting back on its vast asset purchases and, as a result, the yield on the benchmark 10-year note fell to 1.263%, its lowest since Aug. 24.
The yield recovered slightly to 1.2820%, while the dollar lost 0.124%.
“Inflation is not something that we think is going to go away anytime soon. Although the base case is for inflation to moderate over a two- or three-year horizon, we are not betting on sharp drops in inflation, ”said Valentijn van Nieuwenhuijzen, chief investment officer at Dutch asset manager NN IP.
“The impact of Covid on supply chains has been enormous, so it would not be surprising to see some stickiness in inflation.”
WITHDRAWAL FROM CHINA
The broader MSCI index of Asia-Pacific stocks outside of Japan fell 0.8%, while Tokyo’s Nikkei fell 0.5%, away from its more than 31-year closing high of yesterday.
Following Chinese data, Chinese stocks were down 1%.
“This is not a decline, but a downward trend that will last at least until the end of the year,” Iris Pang, ING’s chief economist for China, said of the Chinese data.
Pang said he expected a 0.5 percentage point cut in the mandatory reserve ratio (RRR) of Chinese banks in October, and said more fiscal support was needed for small and medium-sized companies.
Shares in real estate developer Evergrande, which is struggling to raise funds to pay its many lenders and vendors, fell for a third day in a row on Wednesday, losing as much as 5% and reaching their lowest level since January 2014.
Hong Kong’s benchmark index, the Hang Seng, lost 1.8% as casino stocks tumbled after Macau launched a public consultation that investors fear will lead to stricter regulations at the biggest hub. game of the world.
An index that tracks the game’s values fell 22%, while Wynn Macau fell as much as 28%, hitting a record low.
Oil prices rose thanks to a larger-than-expected reduction in crude stocks in the United States, with US crude gaining 1% to $ 71.19 a barrel and Brent crude rising 0.9% to $ 71.19 per barrel. $ 74.31 per barrel.
Spot gold barely changed, trading at $ 1,801 an ounce, having fallen from a week-long high of $ 1,808.50 that it hit on the prospect of lower interest rates.
(Additional information from Sujata Rao and Alun John, edited by Shri Navaratnam, Kim Coghill and Toby Chopra) Translate serenitymarkets