March 5, 2019
LONDON (Reuters) – A three-day rally across European stocks stalled on Tuesday as the Chinese government’s downbeat growth forecasts and weak data reinforced concerns about a global economic slowdown, while weak results from Eurofins and Intertek weighed.
The pan-European STOXX 600 was flat at 0830 GMT, snapping a three-day rally that saw the index hit five-month highs amid hopes of a truce to the protracted U.S.-China trade spat. Germany’s DAX, which is particularly vulnerable to China’s economic health, was unchanged.
Investors were digesting a slew of downbeat news from China after Premier Li Keqiang cut the government’s growth target for this year to 6.0 to 6.5 percent, as expected and pledged more stimulus, including cuts in taxes, increases in infrastructure investment, and lending to small firms.
The news came as data showed China’s services sector expanded at the slowest pace in four months in February, pressured by fewer new orders at home and abroad.
Autos and suppliers, which rely on Chinese demand, were the biggest losers in early deals, with Continental, Volkswagen and Daimler among the biggest fallers in Frankfurt.
British product testing company Intertek was the biggest faller in London even after delivering largely inline full-year results.
Eurofins fell 7.6 percent to the bottom of the STOXX 600 after the food and biopharma product testing firm said it would curb its M&A activity in a bid to shore up margins and cash flow.
Tecan was down 2.8 percent after falling more than 9 percent in early trading.
In contrast, Evonik shares were close to four-month highs after the German chemicals group reported a slight rise in profits thanks to its coating additives and engineering plastics division.
(Reporting by Josephine Mason, Editing by Helen Reid)