European stocks veered sharply lower Thursday, the selloff sparked after Chinese economic data highlighted worries about slowing growth in the world’s second-largest economy.
The Stoxx Europe 600
dropped 0.9% to 335.57, heading toward its lowest close since early August. All sectors fell, led by a nearly 2% fall in the basic materials group
Major indexes were logging losses of more than 1%, with Germany’s DAX 30
down 1.4% to 10,379.86 and France’s CAC 40
off 1.5% at 4,387.54.
Equities were mired in red after data showed Chinese exports fell by a more-than-expected 10% in September. Also, Chinese imports declined by more than anticipated, by 1.9%. China is major buyer of industrial and precious metals.
Shares of iron ore producer BHP Billiton PLC
were pushed down 4.5%, French metals producer Imersys SA
lost 0.7%, and steel producer ArcelorMittal SA
The data “are a reminder that China faces a challenging external environment which is likely to keep export growth subdued in coming quarters. Separately, the drop in imports could be an early sign that the recent recovery in economic activity is losing momentum,” said Julian Evans-Pritchard, China economist at Capital Economics, in a note.
But Evans-Pritchard said there still may be “more upside to import growth in the coming months,” unless there’s evidence of a renewed slowdown in broader economic data. “At the very least, the sharp drop in global commodity prices at the end of last year should provide a more flattering base for comparison.”
The soft Chinese data arrived hours after minutes from the Federal Reserve’s meeting in September suggested policy makers are getting closer to lifting interest rates again.
Other European indexes were knocked lower, leaving Spain’s IBEX 35
down 1% at 8,596.30. Italy’s FTSE MIB
shed 1.3% at 16,264.43.
The U.K’s FTSE 100
fell 0.4% to 6,993.91.
was trading at $1.0995, down from $1.1015 late Wednesday.