Tuesday 27 September 2016

Car makers index nudges European stocks lower

Published 16/04/2016 | 02:30

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York. Photo: Reuters
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York. Photo: Reuters

European shares edged lower in early trading yesterday, with automakers leading the market down after French car parts maker Faurecia fell sharply after an update.

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The STOXX Europe 600 Automobiles and Parts index fell 1.1pc, the top sectoral decliner, as Faurecia shares fell 4.5pc after the company said that its quarterly sales in China were down by 2pc.

The pan-European FTSEurofirst 300 index fell 0.1pc, but was still up 3.8pc so far this week and stayed on track for its best week since mid-February.

However, Carrefour rose 3.8pc after saying that sales rose in its key European markets of Spain and Italy and in Brazil in the first quarter.

In Dublin the ISEQ closed down 0.84pc at 6,211.36. Gainers included Hostelworld and finance house IFG Group.

Across Europe activity was relatively muted heading into the weekend.

"Overall sentiment remains positive, however trading action is clearly pointing towards a slowdown in momentum," said Markus Huber, trader at City of London Markets.

"In light of stocks being overbought in the short term, markets taking a breather and entering a consolidation pattern would certainly be in order and actually by many considered as healthy and necessary. In order for traders to up their risk exposure further, more good news besides China will be needed."

Latest data showed China's economy grew 6.7pc in the first quarter from a year earlier, meeting expectations and providing additional evidence that a slowdown in the world's second-largest economy may be bottoming out.

Greek shares also rose for the first time this week, helped by a surge in Greek bank stocks after the ECB included European Financial Stability Facility (EFSF) notes held by the lenders in its QE shopping list.

Reuters

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