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Oct 11, 2018

European Markets at Close Report: European stocks slump as Wall Street sell-off grips global markets I CNBC


Sam Meredith, Silvia Amaro, Ryan Browne


European markets closed sharply lower on Thursday, impacted by steep losses in U.S. stocks.
 
FTSE FTSE 100 6999.35 -146.39 -2.05% 721882312
DAX DAX 11527.12 -185.38 -1.58% 105760162
CAC CAC 5103.28 -102.94 -1.98% 95840399
The pan-European Stoxx 600 closed provisionally down by 1.95 percent during afternoon deals, with financial services and oil and gas stocks leading the losses. A dramatic sell-off on Wall Street in the previous session prompted the European benchmark to fall to its its lowest level in more than 21 months before recovering slightly.
Selling on both sides of the Atlantic then gathered pace and at one point the two-day loss on the Dow Jones had reached 1,100 points.
Global equity markets have tumbled on the back of heightened fears about global economic growth and rising interest rates.
Looking at individual stocks in Europe, Britain's WH Smith plummeted to the bottom of the index after announcing new plans to restructure its high street stores. Shares of the London-listed stock were down more than 12 percent on the news.
Britain's Hays was also trading sharply lower, after the recruitment agency warned currency headwinds could hit its fiscal 2019 year. Shares of the company were off by around 9 percent.
Meanwhile, Dialog Semiconductor rose to the top of the index Thursday afternoon. The company's shares soared after it announced a new $600 million deal with Apple.

Market 'correction'

Market players are also digesting comments from President Donald Trump. On Wednesday, he criticized the U.S. Federal Reserve once again, calling the central bank "crazy" for its insistence on hiking rates.
The U.S. president also commented on the plunge in markets, calling it a "correction that we've been waiting for a long time."

Are we entering the beginning of a bear market for bonds?

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The International Monetary Fund (IMF) had warned earlier this week that simmering trade tensions, such as those between the U.S. and China, could lead to a "sudden deterioration in risk sentiment, triggering a broad-based correction in global capital markets and a sharp tightening of global financial conditions."
Back in Europe, Brexit is largely in focus after the European Union's chief Brexit negotiator, Michel Barnier, struck an optimistic tone on a deal for the U.K.'s eventual withdrawal from the bloc, saying an agreement was achievable as soon as next week.
Barnier stressed, however, that the U.K. remaining in the customs union would be the best possible solution to avoiding a hard border between the Irish mainland and Northern Ireland.
In corporate news, German carmaker BMW announced it is investing $4.2 billion in a joint venture with Chinese firm Brilliance Auto — giving it a majority stake.
BMW is the first major carmaker to take control of a joint venture within China.