European shares slipped to a one-week low yesterday, after poor trade data from China, the world’s top metals consumer, put pressure on industrial metals prices and the mining sector.
China’s February trade performance was far weaker than economists had expected, with exports tumbling the most in more than six years, days after Beijing sought to reassure investors that the outlook for the world’s second-largest economy is solid.
The STOXX Europe 600 Basic Resources index fell 9.3%, the top sectoral decliner, dragged down by falls of 8.5% to 18.1% in the shares of BHP Billiton, Anglo American, Rio Tinto and Glencore.
“Much weaker Chinese exports clearly point to additional trouble for the Chinese economy in the months ahead, with the global growth slowdown continuing to take a toll,” said Markus Huber, trader at City of London Markets.
“Furthermore, putting early pressure on stocks is the notion that any ECB action being taken on Thursday is already priced in, leading to profit-taking ahead of the ECB meeting.”
In London, shares in Swiss resources giant Glencore tumbled 18.2% to 139.75 pence as investors were also spooked by an accident at its copper and cobalt mine in the Democratic Republic of Congo that left 2 people dead and five missing.
Anglo American saw its shares slump 15.5% to 530.9 pence, Rio Tinto dropped 9.4% to 2,026 pence and Antofagasta was down 9.5% at 5,36.50 pence.
In Paris, the share price of steelmaking titan ArcelorMittal slumped 8% to €4.29, while Germany’s ThyssenKrupp slid 3.6% to €16.56 in Frankfurt.
German energy giant RWE saw its shares slide 4.4% to €10.79, after it posted falling annual profits and forecast fresh gloom for 2016.
According to a Reuters poll of traders published on Monday, the European Central Bank will expand the size of its monthly asset purchases on Thursday. Traders also expect another cut to the already negative deposit rate.
The pan-European FTSEurofirst 300 index, which reached one-month highs on Friday after three straight weeks of gains, was down 0.9% to 1,329.36 points at the close, having touched its lowest level in a week.
Brent crude prices also fell, pressuring the oil and gas sector, which ended down 2.5%.
Across Europe, Britain’s FTSE and France’s CAC both fell 0.9%, with Germany’s DAX down the same amount despite solid data.
German industrial output rose in January at its fastest pace in more than six years, showing that the engine room of Europe’s largest economy began 2016 well despite the financial market turmoil that has hurt business sentiment.
Saipem shares fell 14.8% after two of the banks that guaranteed a recent stock issue at the Italian oil services group sold a 6% stake at a discount on Monday.
Shares in French supermarket retailer Casino fell by 1.8% after criticism from US research firm Muddy Waters. Casino had no immediate comment.
Symrise fell 1.9% in heavy trade of nearly three times its 90-day average volume after the scents and flavours maker posted weak fourth quarter results.
However, Burberry rose 6.6% after the Financial Times reported the luxury goods group was seeking help to fight off a takeover bid.