European Stocks Extend Declines on Draghi's Inflation Comments
(Bloomberg) -- European stocks deepened losses as the euro jumped after Mario Draghi said the factors weighing on euro-area inflation are temporary.
The Stoxx Europe 600 Index retreated 0.6 percent at 10:01 a.m. in London. Banks bucked the trend, following bond yields higher after comments by the European Central Bank President, while shares of automakers held losses. The sector was the worst performer in the Stoxx 600 after General Motors Co. lowered its outlook on U.S. light vehicle sales in 2017, and a top executive told analysts in a conference call that “the market is definitely slowing.”
- “Importantly he suggests deflationary forces are external, temporary shocks and the ECB can overlook,” Neil Wilson, a market analyst at ETX Capital, wrote in a note on Draghi’s comments. “The question is whether the euro zone would survive without the QE support.”
- Tuesday’s losses are worsening the Stoxx 600’s biggest monthly drop since October.
- William Hill Plc dragged leisure shares lower after Investec said further challenges remain for the U.K. bookmaking sector, downgrading the stock to sell.
- Schaeffler AG led declines in auto-related shares, tumbling 10 percent, after the parts maker cut its 2017 profitability forecast.
- Stada Arzneimittel AG fell 4.2 percent after investors in the company tendered too few shares to private equity firms Bain Capital and Cinven, quashing a takeover plan that had been secured after weeks of fierce competition.