European Shares Fall As China Concerns Still Weigh

From Reuters:

LONDON, Aug 26 (Reuters) – European shares fell on Wednesday, tracking declines in other markets as concerns about China’s economy persisted, with bank and mining stocks lagging.

The pan-European FTSEurofirst 300 index, which rose 4.3 per cent on Tuesday, fell 2 perc ent, as did the euro zone’s blue-chip Euro STOXX 50 index.

Germany’s DAX weakened by 1.6 per cent, leaving it some 20 per cent below a record high reached in April.

A rare bright spot was betting firm Paddy Power which surged 20 per cent as investors welcomed its plans to merge with Betfair.

The FTSEurofirst, which risks posting its biggest monthly loss since 2002, suffered its worst one-day drop since November 2008 on Monday. It rallied back on Tuesday after a Chinese interest rate cut boosted markets.

But many investors remain worried by signs of a Chinese economic slowdown and deflationary pressures resulting from Beijing’s devaluation of its yuan currency earlier in August.

“I think the downtrend is still intact because of the bigger picture of anaemic global economic growth. Any reasonable rally on the markets will be sold into,” said Berkeley Futures’ associate director Richard Griffiths.

Read the rest of Sudip Kar-Gupta’s piece here.