Markets Report: Auto sector drags on European stocks
A recovery by global stocks proved short-lived as warnings over a slowing European auto sector soured an upbeat mood, while Wall Street was set for a slightly lower open after enjoying its best session in eight months the previous day.
European stocks, having hit a one-week high in early trade, were back in the red by midday, pulled lower by a 1.6pc fall in an index of auto stocks.
This came after Goldman Sachs analysts said slowing car demand in China and new regulations on emissions testing were hurting investors' sentiment toward European carmaker stocks, and warned this results season could be challenging.
"Not too surprisingly, the effervescent bounce back in Asia equity sentiment has given way," Stephen Innes, a trader at Oanda, said in a note to clients.
"Let's not lose sight of the enormity of global risks which suggests the isolated US growth theme will come to a not-so subtle end just like the synchronised global growth theme did, at least until US-China trade dispute is settled," he said.
As Wall Street opened lower, with the Dow Jones down 1pc, and the Nasdaq 0.8pc lower, European indices maintained their downward trend.
Ireland's Iseq Overall Index, having jumped on Tuesday, was 1.3pc lower soon before the close.
Decliners include fruit firm Total Produce, which was down 2.7pc at €1.95, while Bulmers maker C&C was also 2.7pc lower, at €3.38.
CRH fell 2.2pc to €26.50 before the session ended.
Insulation maker Kingspan advanced 2.2pc to €40.04 before the bell.
The UK's Ftse-100 was 0.4pc lower as the end of trading approached, with France's CAC-40 1pc down and Germany's DAX having fallen 0.8pc.
Sterling weakened after data showed UK inflation fell more than expected in September and before the European Union summit at which Britain was trying to unblock stalled Brexit negotiations.
The weaker-than-expected consumer price inflation, which came in at an annual rate of 2.4pc in September versus forecasts of 2.6pc pushed down an already weakened pound. It has largely shrugged off a deterioration in the Brexit talks in recent days, but traders say it remains at the mercy of the negotiations.