Trade fears regain grip on European shares, real estate stocks fall

August 30, 2018

LONDON (Reuters) – European shares fell back on Thursday, tracking a decline in Asian trading overnight as weakness in Chinese markets eclipsed optimism that a NAFTA deal could be struck by Friday’s deadline.

The pan-European STOXX 600 <.STOXX> fell 0.3 percent by 0730 GMT, set for its biggest fall in a fortnight, while Germany’s DAX <.GDAXI> fell 0.4 percent.

Chinese stocks fell overnight after a Reuters poll showed activity in the factory sector likely slowed for the third straight month in August amid uncertainty over an escalating trade war with the United States.

Trade-sensitive mining stocks <.SXPP> tumbled 0.9 percent and autos <.SXAP> fell 0.5 percent.

Results caused some sharp moves at the stock level.

Unibail-Rodamco-Westfield <URW.AS> shares fell 3.1 percent despite Europe’s largest property company reporting a boost to profits from its acquisition of Australian shopping center giant Westfield.

UK commercial property firms Intu <INTUP.L> fell 4.2 percent after Morgan Stanley cut the stock to underweight from equal-weight, and peer Hammerson <HMSO.L> also fell 3.9 percent.

Traders cited Morgan Stanley downgrading its overall view on the European property sector, and cutting Klepierre <LOIM.PA> and Carmila <CARM.PA> to underweight as well.

Europe’s real estate sector <.SX86P> was the worst-performing, down 1.3 percent.

Swedish radiation therapy gear maker Elekta <EKTAb.ST> was the biggest faller, down 6.6 percent after it reported an unexpected drop in first-quarter operating profit.

Bouygues <BOUY.PA> was a rare gainer, up 4.4 percent after the French conglomerate stuck to its full year outlook for rising profitability as its telecoms division improved.

IWG <IWG.L> shares fell 4.2 percent after RBC analysts cut the stock to “underperform”.

Troubled Swiss asset manager GAM <GAMH.S> tumbled a further 5 percent, hitting its lowest in more than nine years and taking its year-to-date losses to 51 percent.

GAM shares have sold off sharply since the firm suspended a top director and suspended, then liquidated, some bond funds.

(Reporting by Helen Reid; Editing by Alison Williams)

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August 30, 2018 at 01:10PM
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