European markets drop afresh as EU summit looms

European markets succumbed once again to trade tensions and political concerns on Thursday ahead of a tense European Union summit after the stock market enjoyed a brief respite from selling in the previous session.

The pan-European STOXX 600 was down 0.1 percent by 0725 GMT, while Germany’s trade-sensitive DAX managed a 0.1 percent gain.

Financials and mining shares were the biggest drags on the market, while high dividend-paying consumer staples stocks such as Nestle and Unilever, considered safer in times of market stress, made gains.

The pan-European banks sector fell 0.3 percent, extending its sharp losses this week with HSBC, UBS and Credit Suisse among the biggest fallers. Miners declined 0.6 percent.

Oil stocks outperformed after crude prices hit a 3 1/2 year high on unplanned supply disruptions and record demand. The oil sector has been the best-performing in the region this year, up 10.5 percent year-to-date.

In big single-stock movers, H&M shares fell 3.4 percent after the world’s second-biggest fashion retailer reported a slightly bigger fall than expected in second-quarter pretax profit and flagged higher markdown levels in the third quarter after inventories grew again.

French utility Suez declined 3.4 percent after Berenberg cut its rating on the stock to hold from buy.

UK-listed South African stocks Investec, Old Mutual Limited and Mediclinic were among the biggest fallers, dented by a decline in the rand.

Source: Reuters