European stocks fall as rebound ends
European shares closed in negative territory yesterday as volatility made a brutal comeback and ended a short-lived rebound after the beginning of the week's global sell-off.
Europe's VSTOXX volatility index jumped to 32, its highest since the UK's Brexit referendum, and all European bourses ended deep in the red. Europe's STOXX 600 share index fell 1.8pc, France's CAC 40 was down 2pc and Germany's DAX lost 2.6pc.
In Frankfurt, growth-sensitive stocks such as Volkswagen or BASF lost 3.8pc and 3.3pc respectively. The pan-European index is down more than 4pc after equities took a battering worldwide this week.
"Technically, the rebound has failed," said Mikael Jaccoby, of broker Oddo, explaining that markets are now clearly in a "risk-off" mode.
Results from ABB, a bellwether of European heavy industry, failed to cheer investors who have loaded up on cyclical stocks since December in the hope of a profit boost from synchronised global growth. The stock plunged 6.7pc. M&A headlines and positive trading updates, notably from banks, failed to maintain yesterday's rally.
Danish telecoms company TDC led the STOXX 600, shooting up by nearly 18pc -- its best day since June 2007 - after it rejected a takeover approach from Macquarie and three Danish pension funds.
Swiss Re's shares were up 2.1pc after the reinsurer said it was in talks with Japan's SoftBank to sell a minority stake.
Financials limited the damage, with strong earnings from UniCredit and Societe Generale. SocGen's shares rose by 1.9pc after the bank reported forecast-beating results despite a quarterly drop in profit.
"French retail revenues better than guidance and good numbers in markets, with equity derivatives back to normal," Jefferies analysts said. (Reuters)