European Stocks Slip Amid Shutdown, Chinese Data
European stock markets slipped on Tuesday, after data showed growth in the Chinese services sector slowed in September and the U.S. government shutdown moved into Day 8.
The Stoxx Europe 600 index fell 0.2% to 308.58, after closing at the lowest level since Sept. 9 on Monday.
Shares of Novartis AG lost 0.8% after J.P. Morgan Cazenove cut the drug maker to neutral from overweight, as the analysts “believe that a large proportion of the benefit from improved capital allocation is already reflected in the Novartis shares.”
In the same vein, shares of GDF Suez SA lost 1.7% after Citigroup downgraded the utility firm to neutral from buy, as the “earnings outlooks softens.”
More broadly, investors in Europe looked both to the U.S. and China for reasons to move lower.
In China, the HSBC China Services Purchasing Managers’ Index fell to 52.4 in September from 52.8 in August, indicating that growth in the services sector is slowing down. A reading above 50 indicates expansion.
Across the Atlantic, lawmakers continued to fail to agree on a budget for the fiscal year, sending the government shutdown into its eight day. Additionally, both investors and politicians started to worry about the looming debt ceiling in the U.S., which will be hit on Oct. 17 unless Washington agrees on measures to raise the borrowing limit. Failure to lift the debt ceiling could lead to a technical default, although most analysts see this as the less likely outcome. Read: A one-month shutdown risks triggering 20% to 30% correction: Barry Ritholtz
U.S. stock futures pointed to a slightly higher open on Wall Street, after closing sharply lower on Monday.
In Europe, mining firms posted some of the biggest losses, with shares of BHP Billiton PLC down 1.7%, Rio Tinto PLC off 1.4% and Anglo American PLC 0.7% lower.
The losses weighed on the U.K.’s FTSE 100 index , which shed 0.2% to 6,424.41.
Germany’s DAX 30 index dropped 0.1% to 8,583.76 and France’s CAC 40 index lost 0.2% to 4,158.51.
Source : Marketwatch
