Euro Zone Economy Expands 0.3%, Weak China Trade Data Drag Indexes

Lucy Stoeva
08 Mar, 2016
New York City

European markets fell after China reported weakening international trade data. Fourth-quarter GDP grew 0.3% in the euro zone. Symrise warned of a difficult 2016. Burberry Plc surged 6% on takeover speculations.

[R]4:00 PM Frankfurt, Germany – European markets fell after China reported weakening international trade data. Fourth-quarter GDP grew 0.3% in the euro zone. Symrise warned of a difficult 2016. Burberry Plc surged 6% on takeover speculations.[/R]

European stock markets suffered losses on Tuesday after a decline in Chinese exports and a drop in oil prices pulled down shares of resource companies.

February exports dropped 25.4% from a year ago, while imports shrank 13.8%, the customs agency of China reported today.

Resource stocks plunged, after the international trade data from China suggested weakening demand from the second largest economy of the world.

Shares of Glencore plunged 18.5%, Anglo American plummeted 15.5%, Antofagasta lost 9.5%, Rio Tinto tumbled 9.4%, and BHP Billiton fell 8.5%.

Oil and energy stocks also traded lower after a new decline in oil prices. Brent crude oil futures lost 2.6% to $39.77, while WTI crude oil fell 3.3% to $36.66.

Among oil stock, Norway’s Seadrill retreated 9.7%, Tullow Oil was down 7.5%, and Spain-based Repsol erased 2.9%.

Investors overlooked the latest economic data, fourth-quarter GDP grew 0.3% in the euro zone and 0.4% in the wider EU28 region from the previous quarter.

Compared with the fourth quarter a year ago, GDP grew 1.6% in the euro zone and 1.8% in the EU28, according to Eurostat, as an increase in investment spending offset lower household consumption.

German industrial production jumped 3.3% in January, compared to a decline of 0.3% in December, according to the German Economy Ministry.

The data indicated the fastest growth in six years as domestic consumption compensated for the slowdown in exports.

The FTSE 100 index dropped 56.96, or 0.92%, to 6,125.44, while the DAX index declined 86.11, or 0.88%, to 9,692.82

In Paris, the CAC 40 index fell 38.27, or 0.86%, to 4,404.02.

Burberry Plc shot up 6.2% to 1,462 pence on reports that the luxury goods maker was looking for ways to keep the company independent.

The company is trying to identity the investor who has acquired a stake of almost 5%. Burberry had asked HSBC, the custodian of the stake, to reveal the identity of its client, according to press reports.

Symrise AG dropped 1.9% to €55.92 in active trading after the Germany-based flavors and cosmetic ingredients maker warned of a challenging year ahead, despite strong results in 2015.

In 2015, net income rose 7% to €246.8 million, boosted by growth in emerging markets, which accounted for 46% of total sales, and the flavor & nutrition division.

Sales surged 23% to €2.6 billion, mainly due the 2014 acquisition of Diana Group, the French provider of natural extracts.

Excluding Diana’s contribution of €524.8 million in 2015, sales increased 10% over the previous year.

EBITDA soared 41% to €340.9 million from the previous year.

Saipem SpA tumbled 14.8% to 0.37% after two banks that guaranteed a €3.5 billion stock issue at the Italian oil services group sold a 6% stake at a discount yesterday.

Worldpay Plc dropped 4.8% to 277.8 pence despite climbing into profitability last year.

The credit card platform operator reported a pre-tax profit of £19.1 million in 2015, compared with a loss of £47.1 million in 2014.

EBITDA grew 8% to £406.1 million from a year ago.

Revenues increased 9% to £3.96 billion as the number of transactions it processed surged 14% to 13.1 billion.