Europe's Equity Rebound Turns to Gloom Again, Thanks to the U.S.

(Bloomberg) -- Once again, a promising equity rebound in Europe has been derailed by the U.S. open.

The Stoxx Europe 600 Index erased a morning jump of as much as 0.6% to drop 0.4% as of 5:28 p.m. CET. U.S. shares opened in the red, after Federal Reserve minutes released Wednesday failed to assuage fears of monetary tightening even as the U.S.-China trade war raged on.

A cautious mood took over European markets, with defensive sectors such as health care leading gains, while cyclical industries like technology were the biggest decliners. Banks also slumped, as Spain’s Supreme Court slapped its lenders with mortgage taxes. The ongoing earnings season was also in focus as investors sought clues on how companies were faring amid cooling global growth and rising trade tensions.

Cement maker HeidelbergCement AG plunged nearly 9 percent after a profit warning. Tech giant SAP SE was another big decliner, dropping 6 percent as profit underwhelmed.

Among the top gainers, Publicis Groupe SA jumped as much as 8.2 percent after announcing plans to sell a U.S. business alongside its third-quarter results. Roche Holding AG gained up to 2 percent after sales beat estimates yesterday, while Novartis AG climbed as much as 2.4 percent after raising its 2018 sales guidance and agreeing to buy U.S. drugmaker Endocyte Inc.

Meanwhile, prospects of a Brexit deal were delayed once again, with EU leaders aiming to finalize an agreement at a December summit instead of next month. Italian stocks also underperformed on Thursday as the country’s sovereign bond yield spreads widened and EU partners warned that the country’s spending plans were unacceptable.

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