MW: European stocks fall, dragged down by oil and China worries
European stocks fell Thursday, heading for a second straight loss, with energy stocks feeling the weight of falling oil prices and worries about China.
The Stoxx Europe 600 SXXP, -1.13% was down 0.6% to 378.93, with the oil and gas group SXEP, -1.56% putting in the worst performance.
Oil and China blues: Energy shares tracked a drop in oil prices CLU5, -1.23% to below $41 a barrel, which came after an unexpected weekly buildup in U.S. oil stockpiles and as worries about oversupply persisted. Oil futures are at their lowest levels in more than six years.
Among oil producers, Tullow Oil PLC TLW, -4.71% sagged 5.7%, Norway’s Statoil ASA STL, -2.34% fell 3%, and BP PLC BP., -0.22% fell 0.8%.
Concerns about a slowdown in growth in China and its effect on prospects for energy demand have also dogged oil prices and related stocks. Stocks in the region fell Thursday, leaving the Shanghai Composite SHCOMP, -3.42% down 3.4%.
“The great worry is that China will undergo a dramatic drop in the rate of growth, and the knock-on effect to Europe will damage the recovery,” said David Madden, market analyst at IG, in a note.
Minutes released late Wednesday from the U.S. Federal Reserve’s meeting in July “showed us that the U.S. was worried about turmoil in the Chinese stock market even before the drop in value of the yuan, and now the outlook is even bleaker,” he added.
Miners shine: The basic materials group was the sole sector to advance, as mining shares found some relief after being yanked lower in recent sessions. Anglo American PLC AAL, +3.86% rose 2.7%, and Fresnillo PLC FRES, +3.70% gave up 2.9%.
The U.K.’s FTSE 100 UKX, -0.34% which is heavily weighted by commodity stocks, lost 0.6% to 6,367.52. The index is stuck in its longest run of losses since November 2011.
Other benchmarks: Shares in Germany fell, pushing the DAX 30 DAX, -0.85% down 1.2% to 10,554.16. France’s CAC 40 PX1, -0.83% lost 0.9% to 4,839.65.
Greece on Thursday morning repaid 3.4 billion euros ($3.8 billion) to the European Central Bank after having received its first tranche of bailout money from the European Stability Mechanism. Greek stocks GD, -2.99% dropped 3.1% to 654.04.
Movers: Royal Ahold NV AH, +3.43% rose 2.1% after the Dutch supermarket operator said second-quarter net profit rose 33%. The report was the first since the announcement of Ahold’s planned $29 billion merger with Belgium’s Delhaize Group DELB, +3.02% Delhaize shares rose 2.3%.
