- Germany’s DAX Index lost 0.9 percent, led by Daimler.
- France’s CAC 40 Index fell 1.2 percent, led by Renault SA.
- The U.K.’s FTSE 100 Index slid 0.2 percent, dragged by J Sainsbury Plc.
- Spain, Portugal and Italy posted the biggest losses in Europe.
Europe Stocks Split on Trump Win Even as Trade Concerns Dominate
By: Sofia Horta e Costa | Nov 09 2016 at 05:38 AM | International Trade
While the bearish sentiment that engulfed European equities in recent weeks is being vindicated, health-care stocks are easing the pain.
The region’s largest industry group headed for its biggest jump in two months, tempering losses for equity benchmarks after Donald Trump won the race to govern the region’s biggest export market. Novo Nordisk A/S and Shire Plc rose more than 7 percent, after investors punished the shares in recent weeks amid disappointing earnings and speculation Hillary Clinton would push for drug-price controls as president. Citigroup Inc. had cut its rating on the firms in September because of the vote.
Still, risk aversion was evident among most other industry groups. The Stoxx Europe 600 Index lost 0.5 percent at 10:36 a.m. in London, trimming an earlier drop of as much as 2.4 percent, with automakers leading declines. Germany’s Daimler AG and BMW AG slipped at least 2.7 percent. Spanish lender Banco Bilbao Vizcaya Argentaria SA, which has high exposure to Mexico, lost 7.3 percent. The volume of shares changing hands was more than double the 30-day average. The VStoxx Index tracking euro-area equity volatility fell 8.2 percent as Trump’s win ended uncertainty over the outcome of the election.
Vestas Wind Systems A/S, which sells wind turbines in the U.S., dropped to a four-month low on concern Trump’s victory threatens investment in renewable energy. Commodity producers provided support as base and precious metals advanced. Randgold Resources Ltd. and Fresnillo Plc jumped at least 7.3 percent as gold headed for its biggest rally since the Brexit referendum. Construction firms with operations in the U.S. got a boost from Trump’s pledge to increase infrastructure investment in his post-election speech, with CRH Plc and Skanska AB up more than 4 percent.
A win for Trump is a further challenge for a bloc that has had to contend with the U.K. secession vote, as well as doubts over the health of its lenders and the efficacy of central-bank stimulus. While those concerns hurt companies dependent on domestic demand earlier in the year—just as a strengthening U.S. economy helped buoy exporters—the tables turned in the past weeks amid angst that the outcome of the presidential election could damp global trade.
“In the medium-term, I am tempted to say very little will change,” said Stephen Macklow-Smith, who helps manage $2.2 billion of European equities for JPMorgan Asset Management in London. “People will go back to fundamentals: economic recovery is continuing around the world, and Trump will inherit the U.S. economy in pretty good shape. In the next three-to-six months, people will refocus on the recovery in economic growth and potential improvement in corporate earnings in Europe.”
Here are the moves for the region’s major national indexes: