European Stocks Hit Two-Week Low as Tech Shares Extend Selloff
(Bloomberg) -- European equity investors continued to flee this year’s high flyers on Friday -- and they showed little appetite to put their money to work elsewhere.
The Stoxx Europe 600 Index lost 0.7 percent, with almost all industry groups declining. A global rout in technology shares spilled into Europe this week, with the sector down about 4.5 percent since the close on Tuesday, on track for the worst three-day selloff since October 2016. Bank shares, which found bidders earlier this week in anticipation of a U.S. tax-bill breakthrough, dropped 0.7 percent after the vote was delayed.
The selloff sets the tone for what is usually a bullish month for European shares. While the Stoxx 600 has only ended December in the red eight times in its three-decade existence, it has lagged many benchmarks elsewhere in the world this year. Strategists from Morgan Stanley and Credit Suisse Group AG are among those warning 2018 won’t be easy, either.
- The Stoxx Europe 600 auto index was the biggest loser Friday, down 1.8 percent and falling below a key support level representing its 50-day moving average. Citi analysts cut their rating on Peugeot to sell.
- Bucking the trend, Altice rose as much as 6.3 percent after selling some Swiss operations for 214 million Swiss francs, starting an asset-disposal process to ease investor concerns over debt.
- Defensive sectors including real estate, telecommunications, health care outperformed Friday. Most defensive sectors have gained ground over the past five sessions, while tech, miners and automakers have dropped.
- All eyes are on the U.S. Senate. It delayed voting on the Republican tax package until Friday after the collapse of a key compromise to win a majority. Three GOP senators demanded changes after a non-partisan report said it would blow a $1 trillion hole in the national debt.
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