PARIS, June 8 — European shares pulled back from three-month highs today, with losses in healthcare and technology stocks stopping a recent rally on hopes of a post-coronavirus economic recovery.
The pan-European STOXX 600 declined 0.4 per cent, as investors moved out of expensive names, while bidding up laggards such as banking, auto and oil & gas stocks.
Europe’s healthcare index dropped 1.5 per cent, with AstraZeneca sliding 2.7 per cent after Bloomberg reported it had approached US rival Gilead Sciences about a possible merger to form one the world’s largest drug companies.
In a stunning rally last week, the STOXX 600 closed 14 per cent below its all-time high on Friday and the US tech-heavy Nasdaq breached its intraday record high as improving economic data and fresh stimulus measures lent weight to hopes that the worst is behind.
“European markets have opened lower this morning, as markets temper some of their enthusiasm after three strong weeks of gains,” said Michael Hewson, chief market analyst at CMC Markets.
Data released earlier showed German industrial output posted its steepest plunge on record in April, while a sharper-than-expected fall in China’s imports in May pointed to mounting pressure on manufacturers as global growth stalls.
However, losses in European markets were contained.
“The market continues to view all of these economic reports as rear-view mirror stuff, as optimism over economic re-openings continues to drive sentiment,” said Hewson.
Oil majors Royal Dutch Shell, BP and Total rose between 0.7 per cent and 3 per cent as crude prices climbed after major producers agreed to extend a deal on record output cuts.
Danske Bank jumped 8.2 per cent after Estonian bank LHV agreed to buy its Estonian corporate and public sector credit portfolio.
German card payments company Wirecard dropped 3.3 per cent after prosecutors opened proceedings against its entire management board as part of a market manipulation probe.
Swedish telecoms gear maker Ericsson’s fell 2.2 per cent as it said its second-quarter results will take a hit of about 1 billion crowns (RM464.3 million) due to write-downs of product inventory in the Chinese market.
Shares in Delivery Hero SE and Just Eat Takeaway.com NV dropped about 3 per cent after a report that said US food delivery company Grubhub Inc had received takeover interest from the two. — Reuters
