Weak China trade data halts European shares

China’s surprisingly weak trade data brought a four-day rally in European shares to a halt on Monday, with luxury goods and technology stocks leading the drop as investors fretted about slowing global growth and weaker-than-expected earnings.

Dublin

Trading volumes fell below average on the Irish market on Monday with the Iseq overall index dipping 0.54 per cent.

The smaller Iseq 20 index was led lower by Swiss-Irish baking group Aryzta which dropped 8.4 per cent to €1.05. Traders noted the stock has been quite volatile of late, moving between 95c and €1.15.

Airlines were under pressure on the day with Ryanair closing 1.95 per cent down to €10.31. Its budget rival EasyJet closed slightly higher on the London market.

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It was a mixed day for financials with Bank of Ireland closing up 0.87 per cent to €5.20 and AIB dropping 1.24 per cent to €3.68. Bank of Ireland's increase came despite a downgrade in the sector.

Paddy Power suffered from a broker downgrade, dropping almost 4 per cent to €70.10.

London

Ahead of Tuesday’s crunch UK parliamentary vote on Brexit, London’s FTSE 100 declined 0.9 per cent.

While European luxury goods companies suffered, Burberry bucked the trend, garnering strength from a Bank of America upgrade to neutral from underperform.

UK-listed miners, which are also exposed to the health of the UK economy, were down 1 per cent.

JD Sports delivered some good news to the UK's battered retail sector, forecasting profits at the upper end of expectations. Shares gained 6.4 per cent on London's FTSE 250.

Europe

The pan-European STOXX 600 ended down 0.5 per cent, reversing some of last week’s gains that saw the index hit a one-month high. The market notched up four straight days of gains, its longest winning streak since November.

Germany’s DAX and France’s CAC 40 fell 0.3 and 0.4 per cent respectively.

Luxury goods groups, which rely on appetite for handbags and jewellery from China's burgeoning middle class, bore the brunt of the selling. LVMH, Hermes and Gucci owner Kering were among the biggest fallers in Paris, down between 1.6 and 2.6 per cent, while Moncler in Milan dropped 2.7 per cent.

Danish jeweller Pandora slumped 6 per cent to the bottom of the STOXX 600, also hurt by a price target cut by Morgan Stanley.

Having briefly dropped in early deals after reporting fourth-quarter sales at the bottom end of its guidance, chip designer and Apple supplier Dialog Semiconductor jumped 1.9 per cent.

Continental shares rose 3 per cent, also rebounding from initial losses after the auto parts supplier warned of deteriorating conditions in the car sector.

Elsewhere, M&A caught investors' attention after pan-European stock market operator Euronext officially launched its all-cash $729 million bid for Oslo Bors. The news came just hours after the Norwegian stock market operator's board said it had found alternative bidders and would issue a recommendation by late February. Euronext shares gained 1 per cent, while rival London Stock Exchange rose 1.5 per cent as the news stirred expectations of potential dealmaking among stock market operators.

New York

China’s trade data reinforced concerns that US tariffs on Chinese goods were taking a toll on the world’s second-largest economy, prompting companies such as Apple to issue profit warning.

Chipmakers, which get a sizable portion of their revenue from China, took a hit, with the Philadelphia SE semiconductor index slipping 1.60 per cent.

Trade-sensitive Boeing and Caterpillar fell more than 1 per cent.

Citigroup shares reversed course to rise 3 per cent despite reporting lower-than-expected revenue.

The S&P financial sector was the only sectoral gainer, lifting US stocks off their early lows.

Among other stocks, PG&E plunged 49.22 per cent after the biggest US power utility said it was preparing to file for Chapter 11 bankruptcy for all of its businesses.

– Additional reporting: Reuters