Home Adidas sales European stocks slide on Evergrande woes, German corporate morale low

European stocks slide on Evergrande woes, German corporate morale low



(Reuters) – European stocks fell on Friday as concerns over struggling property developer China Evergrande and weak German business confidence data prompted investors to post profits after a midweek rally.

The DAX chart of the German stock index is pictured on the stock exchange in Frankfurt, Germany on September 23, 2021. REUTERS / Staff

European sportswear manufacturers Adidas, Puma and JD Sports fell around 3% each after US rival Nike cut sales guidance for fiscal 2022 and predicted delays during the holiday season due to ‘a tightening of the supply chain.

Retail stocks were the most down in Europe, down 1.5%, while the region-wide STOXX 600 fell 0.8%. But a three-day rally put the index on track for small weekly gains.

“Equities rallied to take an early break this morning in the face of the likely Evergrande default,” said Sébastien Galy, senior macro strategist at Nordea Asset Management.

Investor concerns over Evergrande resurfaced as a deadline for paying $ 83.5 million in bond interest was passed without any remarks from the company, bringing it closer to a potential default.

Meanwhile, an Ifo Institute survey showed German business morale in September fell for the third month in a row, hit by supply chain issues causing a “bottleneck recession” for manufacturers in Europe’s largest economy.

Germany’s DAX fell 0.8% ahead of the weekend the country votes to elect German Chancellor Angela Merkel’s successor.

The latest poll showed support for the conservative CDU / CSU alliance, while the Social Democrats cling to their lead.

“While there is a lot of noise surrounding the outcome, the coalition’s possible permutations are labyrinthine and will almost certainly not be clarified on Monday or next week,” said Jeffrey Halley, senior market analyst at OANDA.

“The election could be good for some intra-day euro volatility on Monday morning.”

The benchmark STOXX 600 is poised to end September in the red after seven straight months of gains, as rising energy prices and supply chain bottlenecks fueled fears of inflation, while major central banks plan to cut stimulus measures in the pandemic era.

However, the President of the European Central Bank, Christine Lagarde, said in an interview broadcast on CNBC that many of the factors of a recent spike in inflation in the euro area are temporary and could subside next year. .

UK drugmaker AstraZeneca jumped 2.6% after the company said its cancer drug Lynparza met its primary target in an advanced-stage trial.

Italy’s Enel and Eni utilities edged up after the government set aside more than 3 billion euros ($ 3.5 billion) to curb a sharp rise in retail energy bills.

Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur