Here Are Sectors Suffering the Most in Europe's Stock Sell-Off

(Bloomberg) -- European equities sank to a two-year low on Thursday, and sectors most exposed to trade war concerns again bore the brunt of the pain.

Miners, tech stocks and autos were among the worst performing sub-groups as traders fretted that the arrest of Huawei Technologies Co.’s chief financial officer may destabilize the recent truce between the U.S. and China.

Key Insights

  • The SXPP basic-resources index fell the most, dropping 3.3 percent. Doubts over the credibility of the trade truce damped the outlook for metals, with the price of copper, nickel and zinc declining at least 1 percent.
  • A slide in oil & gas stocks was just as bad, with sentiment soured additionally by a falling crude price after Saudi Energy Minister Khalid Al-Falih said OPEC has yet to reach an agreement on output cuts.
  • Another casualty was tech, in particular Huawei suppliers AMS AG and STMicroelectronics NV. Barclays downgrades of Capgemini SE and Hexagon AB added to the gloom.
  • Autos, industrials and construction materials were unsurprisingly among the biggest decliners, with drops of 2.6 percent, 2.8 percent and 2.9 percent in the respective sector indexes. Renewed trade war doubts have hit risk sentiment, according to Hantec Markets analyst Richard Perry.
  • Underperformance in chemical stocks wasn’t helped by UBS downgrades of Lanxess and Covestro. The broker sees the worst period of demand contraction since 2015 next year.
  • Banks, one of this year’s most unloved sectors, continued out of favor after Fitch said interest-rate hikes may have to wait until 2020. Financial services and insurance stocks also fell by more than the broader market.

©2018 Bloomberg L.P.