Shares in luxury goods group Kering and chemicals company BASF fell on Friday after business updates, while new worries about the Ebola virus weighed on European stock markets. Kering fell 4.6 percent, making it the worst-performing stock on the pan-European FTSEurofirst 300 index after sales fell at its Gucci brand.
Chemicals company BASF also declined by 3.3 percent after cutting its 2015 earnings forecast on weak demand in its European home markets. The declines in the two companies, coupled with new worries over Ebola, contributed to push down the FTSEurofirst 300 by 0.3 percent to 1,313.21 points going into the close of trading.
The latest Ebola concerns arose after news that a New York City doctor who treated Ebola patients in West Africa had become the first person to test positive for the virus in the US financial hub. Joe Rundle, head of trading at ETX Capital, told Reuters Insider Television that one of the problems about Ebola was that investors still could not quantify the kind of impact it might have on the world economy. "People have no idea how to price it," said Rundle. Others felt the Ebola worries might be exaggerated.
"I think the fears are a bit overdone. In previous cases, such as avian flu, the virus ended up being contained quite quickly," said Caroline Vincent, European equities fund manager at Cavendish Asset Management. The euro zone's banking index edged up by 0.7 percent as investors bet that a weekend update on the sector's financial health from the European Central Bank would not reveal too many problems at the region's top banks.
Banca Monte dei Paschi di Siena shares surged 9.5 percent as traders said the bailed-out Italian lender could pass the health checks relatively unscathed. Global truck maker Volvo also outpaced the broader stock market downturn, gaining 6.9 percent after a surprise rise in core earnings. The FTSEurofirst 300 index has rebounded slightly this week to put it on course for its best week since December 2013.
Nevertheless, many investors have continued slashing exposure to European equities, which have been knocked back over the last month by weak European economic data. US-based funds invested in European shares saw outflows for a third straight week, according to Lipper data. A Lipper survey of 109 US-domiciled funds investing in European shares, including exchange-traded funds (ETFs), showed redemptions of $958 million in the seven days to October 22, adding to the record weekly outflows of $1.33 billion from last week.
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