EUROPE MARKETS: European Stocks Slump As Caution Over Geopolitical Tensions Lingers

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08/10/2017 | 04:21 pm


By Carla Mozee and Sara Sjolin, MarketWatch



European stocks fell Thursday, with caution still lingering as tension between U.S. and North Korea escalated, and as German consumer-goods company Henkel AG & Co. was among the companies whose shares pulled the market toward a second consecutive decline.



The Stoxx Europe 600 fell 1% to 376.05, led by losses in the industrial group. The utility and health-care sectors were the only ones showing gains. The pan-European benchmark on Wednesday fell 0.7% in a selloff prompted by tensions between the U.S. and North Korea escalated.



"European stocks have suffered heavy losses again because of the situation between the U.S. and North Korea," said David Madden, market analyst at CMC Markets, in a note.



"The showdown between the two nations has scared off many investors. Whenever dealers hear the word 'war' they usually run for the hills, and that is exactly what we have seen today. While tensions are running high, traders will be reluctant to be long," he added.



On Thursday, Germany's DAX 30 lost 1.2% to 12,014.30. The index briefly dipped to 11,993.73, trading below the 12,000 level for the first time since April.



France's CAC 40 index fell 0.6% to 5,115.23, while in London, the FTSE 100 moved down 1.4% to 7,389.94 , for its biggest one-day percentage loss since April.



Those moves came after North Korean leader Kim Jong Un made an explicit threat to strike a U.S. military base in Guam .



His order, reported in state media, came hours after U.S. President Donald Trump late Tuesday warned Pyongyang not to "make any more threats" to the U.S, saying it would face a "fire and fury" response "like the world has never seen." Trump's comments came after a Washington Post report (https://www.washingtonpost.com/world/national-security/north-korea-now-making-missile-ready-nuclear-weapons-us-analysts-say/2017/08/08/e14b882a-7b6b-11e7-9d08-b79f191668ed_story.html?utm_term=.0938becb046e) that North Korea has built a miniaturized nuclear warhead.



European equities on Thursday didn't find much relief from a pullback in the euro, with the shared currency buying $1.1730, down from $1.760 late Wednesday in New York.



Stock movers: Henkel (>> Henkel AG & Co KGaA) fell 4.1% after the maker of Schwarzkopf hair care products, Right Guard deodorant and Persil detergent posted second-quarter organic sales growth of 2.2%, which was below consensus of 3.2%, according to Investec.



"Henkel's Beauty has underperformed peers for several years and given the results this morning, this trend looks set to continue -- at least over the near-term," said Investec analyst Eddy Hargreaves in a note.



Adecco Group AG shares (>> Adecco Group) fell 6.4%. The staffing services company posted a rise in second-half profit to EUR192 million, and analysts polled by Thomson Reuters had expected earnings of EUR194 million.



Aegon NV (>> Aegon) climbed 5.3% as the Dutch insurer reported a 23% rise in underlying earnings and said it's selling its Aegon Ireland PLC business to help increase financial flexibility.



Galapagos NV (>> Galapagos) soared 8.3% after the company posted positive clinical trial results of a pulmonary fibrosis treatment.



Shares of SFR Group SA (>> SFR Group) rallied 9.2% after Altice NV (>> Altice) raised its stake in the French telecoms company to more than 95% and said it's planning a full buyout.





Stocks mentioned in the article : Henkel AG & Co KGaA, Adecco Group, SFR Group, Galapagos, Aegon, Altice
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