Tempered auto stocks slide Europe down, market treads water

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Tempered auto stocks slide Europe down, market treads water

On Wednesday, the 6th of March 2019, the European stocks were mostly stalled and very little changed, as poor data from auto sectors had weighed on investors’ confidence and this year’s rally which lifted European shares to a five-month high appeared to be fraying.

A rally in the Chinese equities that posted its best intra-day gain in a month over hopes of fresh financial stimulus had failed to spread over Europe, as the Pan-European STOXX 600 index slipped from a five-month high.

Mostly, auto sectors were troubled on Wednesday’s market after German bearings maker Schaeffler’s had warned the market saying an “extremely challenging business environment ahead”, which sent its shares down 6.2 percent.

The Auto Sector index was down by 0.9 percent, which catalyzed a curb of Germany’s DAX by 0.3 percent. FTSE 100 posted a slight gain of 0.17 percent, while the Italian stock indexes had also closed higher, mostly led by Italian banking sectors over cheap loan talks.

Despite a market treading water ahead of ECB and BoE minutes this week, investors remained optimistic over the quick gains of Chinese equities as an immediate response of the monetary stimulus. As both ECB and BoE are expected to inject fresh financial stimulus this week in form of low-tax long-term loans, analysts are expecting a quick growth pick up for European shares.

Citing a rapid easing of Chinese market a good omen for the European traders, head of economic and investment research at Intermediate Capital Group, Nicholas Brooks said, “The good news is China is now easing quite aggressively.

The less good news is it takes time for credit easing to impact the domestic and global economies”.