PARIS: European shares drifted lower on Monday after dour updates from luxury companies weighed on the sector, while sentiment remained fragile following the assassination attempt on US presidential candidate Donald Trump over the weekend.
The continent-wide STOXX 600 closed 1% lower, snapping a three-session winning streak.
Leading losses were shares in Burberry, down 16.1% after the British luxury group warned on profit, scrapped its dividend and replaced its CEO Jonathan Akeroyd after two years with former Coach boss Joshua Schulman.
“If the current levels of trading persist, the group could slip to an operating loss in the first half of the year, which will add to what has been a significantly difficult time for the company,” said interactive investor’s head of markets Richard Hunter.
Swatch Group shed 9.8% as the world’s biggest watchmaker reported a steep fall in first-half sales and earnings.
A gauge of the top ten European luxury stocks lost close to 3%, while the personal and household goods sector led losses amongst the major STOXX 600 sectors with a 2.1% drop Adding to losses on the broader index, miners eased 1.6%, tracking lower base metal prices after data showed China’s economy grew much more slowly than expected in the second quarter.
European renewable energy companies like Orsted, RWE, Nordex, Vestas and Siemens Energy dropped between 3.4% and 6.4%, with traders linking the weakness to increased chances of a US election win for Donald Trump.
Trump, who has stated that he would halt offshore wind development if re-elected, cements his hold on the Republican Party at its 2024 convention this week, having survived an assassination attempt and navigated numerous legal tangles on the road to the party’s presidential nomination.
Focus will now be on ECB President Christine Lagarde’s remarks later in the day, ahead of the central bank’s policy meeting later this week.
Among other stocks, Nordea lost 3.8% after the Finnish bank reported second-quarter operating earnings just below expectations.
Britain’s Ocado slipped 10.4% after brokerage Bernstein downgraded the online grocer and technology group to “underperform”, saying the company needs to “consider its options” to go private in a grocery deal and reduce cash burn.
TomTom dropped 8.4% after the digital mapping specialist suspended its revenue target for 2025 and trimmed its expectations for this year as weak demand for new cars weighed on its automotive location technology business.