European mining and luxury stocks tumble as global China rally fades
Adds analyst quote in paragraph 9, updates prices
By Alun John and Lucy Raitano
LONDON, Oct 8 (Reuters) -European mining stocks and luxury names fell sharply on Tuesday as a stimulus-backed buying frenzy of Chinese-exposed stocks faded outside mainland China, after officials failed to inspire confidence in plans to stimulate the world's No.2. economy.
The STOXX miners index shed 4.4% in the first hour of trading.SXPP and if that early fall is sustained it would be its biggest daily fall since March 2023.
European luxury names meanwhile fell 2.7%,also affected by China announcing provisional anti-dumping measures on brandy imports from the European Union. .STXLUXP
Chinese Economic planner chairman Zheng Shanjie told reporters on Tuesday that China was "fully confident" of achieving economic targets for 2024 and would pull forward 200 billion yuan ($28.35 billion) from next year's budget to spend on investment projects and support local governments.
But his failure to detail specific new stimulus measures rekindled market doubts about Beijing's commitment to ensuring the economy can climb out of its most serious slump since the global pandemic and reach 5% growth.
Hong Kong's Hang Seng Index .HSI tumbled over 8%, even as Chinese onshore markets surged on return from a week-long holiday.
In Europe, Anglo American AAL.L fell 5.6% Antofagasta ANTO.L fell 5.3%,and Rio Tinto 5% RIO.L,broadly in keeping with a fall in iron ore futures. MET/L
Burberry, BRBY.L Kering PRTP.PA and LVMH LVMH.PA were all down between 4% and 6.5%.
"China is the usual suspect," said Stephane Ekolo, equity strategist at TFS Derivatives.
"Many people were expecting more stimulus from China and they were somewhat disappointed by the fact the China is holding back on this matter."
Miners and luxury stocks had been among the biggest gainers in Europe on aggressive stimulus measures - the largest since the pandemic announced by China, before the week-long Golden Week holiday.
($1 = 7.0550 Chinese yuan renminbi)
Reporting by Alun John and Lucy Raitano; editing by Dhara Ranasinghe
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
