The pan-European STOXX 600 index declined 1%, with all major regional markets down between 0.5% and 1%
Europe’s main share indices dropped to a two-week low on Wednesday, with technology stocks leading declines as concerns of an imminent slowdown in the US and weakness in the Chinese economy rattled global markets.
The pan-European STOXX 600 index declined 1%, with all major regional markets down between 0.5% and 1%. The STOXX volatility index rose to the highest since August 9.
Europe’s technology stocks led declines with the sector declining more than 3% to a near one-month low, tracking a selloff in Wall Street technology stocks after a slew of softer than expected economic data dampened sentiment.
Additionally, China’s manufacturing activity dipped to a six-month low in August, weighing on luxury stocks in Europe such as LVMH Holdings, Richemont and Christian Dior which skidded between 3% and 5.8%.
Concerns about slowing growth in the US and China, the world’s two biggest economies, have pressured European markets over the past month as the region’s economies grapple with their own economic woes.
Euro zone business activity was a mixed bag, with France’s services sector receiving a boost in August from hosting the Olympic Games, while growth in Germany’s services sector slowed for a third successive month in a further sign that Europe’s biggest economy is losing steam.
HCOB’s composite Purchasing Managers’ Index for the region came in at 51.0, a touch below a preliminary estimate of 51.2. Producer prices slid 2.1% in July on a yearly basis.
A mixed set of Eurozone Services PMIs did little to offset the pervading gloom, according to David Morrison, senior market analyst at Trade Nation.
Investors seem wary of buying the dip ahead of this week’s U.S. employment data, he said.
Despite the selling pressure, European equities remain up 8.5% for the year as prospects of lower borrowing costs have kept markets afloat. The ECB is widely expected to cut rates later this month.
