European shares fell, Thursday, affected by negative sentiment stemming from renewed concerns about the real estate sector in China and mixed quarterly earnings results.
By 0710 GMT, the pan-European Stoxx 600 index was down 0.4 percent, retreating from a six-week high. Asian stocks fell after news of a failed asset sale of $2.6 billion in debt-laden Chinese property developer Evergrande.
Shares of China’s Evergrande, listed in Hong Kong and wracked by a debt crisis, lost 12% on Thursday when the company resumed trading after a hiatus of more than two weeks.
Mining companies, automakers and industrial companies were at the forefront of the decliners in Europe, coinciding with growing concern about a group of corporate earnings results announced today, Thursday, and in the coming weeks.
Shares in Swiss engineering and technology ABB fell 3.4 percent after the company cut its annual sales forecast following a warning of component shortages.
AB Volvo shares fell 2.1 percent, although earnings beat expectations, but warned that persistent chip shortages were hampering production at the truck maker.
Barclays shares fell 0.6 percent despite the Bank of England’s strong performance in the third quarter.
Shares in Unilever rose 1.2 percent after the consumer goods company posted sales growth that exceeded expectations in the third quarter, despite raising prices in an attempt to counter higher energy prices and other costs.
European shares closed, on Wednesday, at their highest levels in six weeks, supported by the results of Nestle, and the European Stoxx 600 index closed 0.3 percent higher, and oil stocks helped to achieve profits with a slight rise in crude prices.
In Tokyo, the Japanese Nikkei index fell about 2%, Thursday, under the weight of new concerns about the Evergrande, anxiety ahead of a general election and concerns about the impact of rising costs on the future of companies.
The Nikkei fell 1.87 percent to close at 28,708.58 points, while the broader Topix index lost 1.13 percent to 2000.81 points.
Last night, the US Standard & Poor’s and Dow indices rose, but the Nasdaq fell as technology stocks took a breath.
The Nasdaq’s closing down triggered a sell-off in Japanese technology heavyweights as investors anxiously await whether Prime Minister Fumio Kishida will take decisive action to shore up the pandemic-ridden economy.
“The ruling LDP is likely to win the majority, but it is not clear whether it will make changes that meet market expectations,” said Eko Mitsui, a fund manager at Aizawa Securities. Mitsui was referring to the October 31 lower house elections.
“Investors are also concerned about the potential impact of higher costs and oil prices, as well as supply chain disruptions, on companies’ outlook,” he added.
US stocks closed higher on Wednesday, as reports of companies posting profits in the third quarter calmed investor fears despite supply chain problems and rising costs.
The Standard & Poor’s 500 index rose by 17.14 points, or 0.38 percent, to close at 4536.77 points.
The Dow Jones Industrial Average closed up 157.95 points, or 0.45 percent, to 35,615.26 points.
As for the Nasdaq Composite Index, it was outside the group of winners, as it fell 6.25 points, equivalent to 0.05 percent, to close trading, recording 15,121.68 points.