European stocks drop to two week low on growth, trade nerves
Worries about US bond markets signalling an impending recession and a still rumbling trade war between the world's two biggest economies sent European shares sinking further on Wednesday after a 3pc drop on Wall Street.
The pan-European STOXX 600 was down 1.2pc by 0830 GMT, hitting its lowest level since November 23, with Germany's DAX, France's CAC 40, and Britain's FTSE 100 all falling 1.3pc.
Financials were the biggest drag on European shares as investors dumped sectors highly sensitive to economic growth. Europe's bank index fell 1.7pc, in line with tech after the highly valued US tech sector sold off.
German carmakers Daimler, Volkswagen, and BMW fell 0.5 to 0.8pc, outperforming the DAX as investors digested what seemed a relatively positive outcome from auto executives' meeting at the White House.
President Trump pressed the carmakers to increase investments in the United States, something the executives said they planned to do but wouldn’t be able to if the administration went ahead with threatened tariffs.
White House economic adviser Larry Kudlow, among those in the meeting, said he did not think that car tariffs were imminent.
Shares in valve manufacturers Rotork and Weir , which supply the oil industry, tumbled 3 to 5pc after US energy services firm Schlumberger gave a warning on Tuesday, saying a drop in fracking activity would hit its North America revenues.
M&A news was also a driver.
Shares in Shire jumped 4pc at the open, then trimming gains to trade up 2pc, after shareholders of Japan's Takeda approved the takeover of the London-listed pharmaceutical firm.
Broker notes hit some stocks. Hargreaves Lansdown fell 5.4pc after Morgan Stanley cut its rating to underweight.