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European stocks extend losses in risk-off trade; Dax down 1.53%

Published 08/27/2013, 07:25 AM
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Investing.com - European stocks extended losses on Tuesday, as risk appetite was hit by concerns that the U.S. may take military action against Syria’s government, while uncertainty over the future of the Federal Reserve's stimulus program persisted.

During European afternoon trade, the EURO STOXX 50 plummeted 1.51%, France’s CAC 40 declined 1.47%, while Germany’s DAX 30 tumbled 1.53%.

Markets were jittery after U.S. Secretary of State John Kerry said President Obama will hold Syria’s government accountable for using chemical weapons.

Meanwhile, uncertainty over how soon the Fed will start to unwind stimulus measures continued after data on Monday showed that U.S. durable goods orders fell in July, raising concerns over domestic demand.

The Commerce Department said U.S. durable goods orders dropped 7.3% in July, worse than expectations for a 4% decline. It was the largest decline since August 2012.

Financial stocks were broadly lower, as French lenders BNP Paribas and Societe Generale plummeted 2.21% and 2.49%, while Germany's Deutsche Bank retreated 2.52%.

Among peripheral lenders, Spanish banks Banco Santander and BBVA plummeted 2.14% and 2.38% respectively, while Italy's Unicredit and Intesa Sanpaolo declined 2.63% and 2.71%.

Elsewhere, Aker Solutions plummeted 2.34% after second-quarter earnings missed analysts' estimates.

ThyssenKrupp was also on the downside, losing 2.82%, after Nomura downgraded Germany’s largest steelmaker to neutral from buy.

In London, FTSE 100 declined 0.62%, as U.K. lenders tracked their European counterparts lower.

Shares in HSBC Holdings slid 1.10% and Barclays dropped 1.54%, while Lloyds Banking and the Royal Bank of Scotland tumbled 1.87% and 2.67%.

Mining stocks added to losses as Eurasian Natural Resources retreated 1.21% and Antofagasta plummeted 2.42%, while Polymetal dove 6.83%.

However, Petrofac and Fresnillo were among the top gainers, with shares up 6.33% and 6.46% respectively.

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.47% decline, S&P 500 futures signaled a 0.53% drop, while the Nasdaq 100 futures indicated a 0.52% loss.

Also Tuesday, a report showed that the Ifo index of German business climate rose to a 16-month high of 107.5 in August from 106.2 in July. Economists had expected the index to tick up to 107.0.

The Current Assessment Index rose to 112.0 in August from 110.1 in July, compared to expectations for an increase to 110.9.

Later in the day, the U.S. was to publish private sector data on house price inflation, as well as a closely watched report on consumer confidence.


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