Hong Kong gloom spreads to Europe, miners lead decline

Published 11/11/2019 in Business News, Economy & Finance

Hong Kong gloom spreads to Europe, miners lead decline

(Reuters) – European shares edged lower for a second session on Monday as an escalation in Hong Kong protests, an inconclusive Spanish election and Moody’s warning on Britain’s sovereign debt made for a gloomy start to the week.

The pan-European STOXX 600 index fell 0.2% by 0949 GMT, with London’s FTSE 100 .FTSE leading declines among the major regional indexes with a 0.5% drop.

Ratings firm Moody’s warned on Friday it might cut its rating on Britain’s sovereign debt again, saying that neither of the main political parties in the upcoming election was likely to tackle high borrowing levels. Moody’s lowered the outlook on Britain’s current Aa2 rating to negative from stable.

Adding to the negative mood, data showed Britain’s economy grew at its slowest annual rate in nearly a decade in the third quarter.

Banks were among the biggest decliners in London, with Asia-focused firms such as HSBC (HSBA.L) and Standard Chartered (STAN.L) down nearly 2% after the long-running Hong Kong protests turned violent.

Luxury stocks including Burberry (BRBY.L), LVMH (LVMH.PA), Richemont (CFR.S) and Swatch Group (UHR.S), also exposed to Hong Kong, fell between 0.5% and 2.5%. Miners .SXPP took the biggest hit, and were down about 2%.

Spain’s main IBEX index .IBEX fell 0.3% after the weekend’s parliamentary election pointed to a legislative stalemate with neither the left nor the right having a majority.

“The second general election in less than a year has not resolved the political impasse, but has actually exacerbated it,” Unicredit analysts wrote in a note.

The benchmark STOXX 600 index had risen to its highest in over four years last week on signs of progress in U.S.-China trade talks, although investors are wary about a trade deal with Beijing after U.S. President Donald Trump said he had not agreed to rollbacks of U.S. tariffs sought by China.

London-listed shares of BHP Group (BHPB.L) (BHP.AX) slipped 2.1% after the company touted bullish plans to expand in oil and gas, defying investors who want the world’s biggest miner to cast off the business.

Top gainer on the STOXX 600 was British baker and takeaway food group Greggs (GRG.L), which jumped 17.1% after forecasting a 2019 pretax profit ahead of previous expectations.

Shares in recent stock market debutant TeamViewer (TMV.DE), gained 6% after the German software company reported a near-doubling in core profits and an expansion of its margins in the third quarter.

Shares in Novartis (NOVN.S) gained 1.5% after the Swiss drugmaker said it was buying the Japanese generics unit of South Africa’s Aspen Pharmacare (APNJ.J) in a deal worth up to 400 million euros ($440.80 million).

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