Tech, Boeing suppliers drag European shares lower - GulfToday

Tech, Boeing suppliers drag European shares lower

London-Stock750

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany. Reuters

European stocks fell on Monday following a week of strong gains, with losses in technology stocks and European suppliers of US planemaker Boeing, weighing the most.

The pan-region STOXX 600 index was down 0.2 per cent at 0940 GMT, having touched eight-month highs last week.

Stocks in Spain fell the most, down 0.73 per cent, while Germany’s trade sensitive DAX index fell 0.5 per cent, breaking a seven day winning streak - its longest since October 2017.

Earlier on Monday data showed that German exports and imports fell more than expected in February, the latest sign that Europe’s biggest economy will likely post meager growth in the first quarter. “It’s a very, very slow start, with most sectors down with a little bit of profit taking after last week,” said Mark Taylor, sales trader at Mirabaud Global Thematic Group in London.

Taylor also said there was a ‘buying drought’ given the absence any new headlines on trade, with investors watching for Brexit developments, the European Central Bank’s policy meeting and China data at the end of the week.

The European Central Bank is expected to hold borrowing costs on Wednesday amid slowing growth indicators, while later in the week, China is expected to report loan growth, inflation and trade data.

In Spain, airports operator Aena was among the biggest drags on the index, after RBC downgraded the stock to ‘underperform’ from ‘sector perform’ as it expects regulatory risk to be priced in over the next 12 months.

Software company SAP, Europe’s most valuable technology company, weighed the most on the STOXX 600 index, with shares down about 2 per cent after it said the head of its cloud business group had quit, the latest in a string of top departures. Boeing’s European suppliers Safran, Melrose and Meggitt came under pressure after the planemaker said it would cut monthly output of its 737 aircraft by nearly 20 per cent in the wake of two deadly crashes.

Meanwhile, French rival Airbus rose 0.9 per cent.

Continental AG slipped 1.8 per cent as Kepler Cheuvreux downgraded the auto parts maker to “hold” from “buy”.

Auto stocks regained some of their early losses after a near 7 per cent surge last week, including Daimler which had been weighed down by the prospect of potentially hefty fines after EU antitrust regulators charged the company along with Volkswagen and BMW with colluding to block the rollout of clean emissions technology.

“These are minor moves given the rally the auto sector has had over the past two or three weeks. If anything, the sector has rallied off its lows so it seems like there is still money to get out there,” Taylor said.

Italian-U.S. carmaker Fiat Chrysler Automobiles NV (FCA) gains also helped cap declines in the auto sector.

Fiat Chrysler agreed to pay electric carmaker Tesla Inc hundreds of millions of euros to allow Tesla vehicles to be counted in its fleet to avoid fines for violating new EU emission rules.

Agencies