Stocks recede, China worries, Renault plunges

by Patrick Vignal

PARIS (Reuters) – Most European stock markets retreat Friday at the opening, a series of corporate results and a disappointing Chinese indicator erasing the timid hope born on the eve of an agreement on Brexit.

The sharpest decline in early trade is for Renault, which falls by more than 14%, the largest decline in the broad European index Stoxx 600, after warning Thursday on its annual financial results.

In Paris, the CAC 40 index lost 0.44% to 5,648.19 points around 07:30 GMT. In London, the FTSE was down 0.42%. The German Dax, almost unchanged, resists the general trend

The EuroStoxx 50 index of the euro zone drops 0.13%, the FTSEurofirst 300 0.44% and the Stoxx 600 0.22%.

China's gross domestic product growth slowed in the third quarter to 6.0% year-on-year, at a low of almost 30 years, in a context of trade conflict with the United States that weighs on the second largest economy in the world. world.

Official data released Friday highlight the prolonged slowdown in the Chinese economy, after GDP growth of 6.2% year on year for April-June, despite the support measures launched since last year by Beijing .

Analysts polled by Reuters forecast an increase of 6.1% between July and September compared to the previous year.

The stock markets reacted cautiously Thursday to the announcement of an agreement between London and Brussels on Brexit, validated in the wake of the European Council, but which must still be approved by the House of Commons, with a planned vote Saturday.

VALUES

The news on the markets is also marked by the accounts of companies in the third quarter, which fall in rain and are, overall, not very good.

Those of Renault are very heavily sanctioned. The French automaker warned Thursday that over the year as a whole, its sales would contract and that its margin would be lower than expected in the car because of difficulties in some markets, such as Turkey and Argentina , in a generally unfavorable context for the sector.

In the wake of Renault, PSA drops 1.4%. The Stoxx automotive index loses 1.6%, the biggest sectoral decline in Europe.

The punishment is also severe for Danone losing 6.36%. Third-quarter results published by the French food giant are below market expectations and the group said it will review its target for comparable store sales growth for 2019, between + 2.5% and +3 , 0% against around 3% previously.

Thales also suffers (-4.46%) after lowering its 2019 organic growth target on Thursday, due to weaker than expected sales in its "Aerospace" and "Defense & Security" divisions.

IN ASIA

The Tokyo Stock Exchange finished up 0.18% after slashing its gains following the release of the Chinese GDP statistic. The SSE Composite index of the Shanghai Stock Exchange lost 1.3%, its largest percentage decline on a session for a month.

A WALL STREET

The NYSE ended Thursday on a small rise, the agreement on Brexit and the beginning of the season of corporate earnings in the United States giving rise to moderate optimism among investors.

The Dow Jones index gained 23.90 points, or 0.09%, to 27,025.88. The S & P-500, the broadest and leading reference of managers, took 8.26 points, or 0.28%, to 2.997.95. The Nasdaq Composite advanced by 32.669 points (+ 0.40%) to 8,156.85 points.

On the earnings front, analysts are currently expecting a 2.9% decline in S & P-500 corporate profits in the third quarter, according to Refinitiv's IBES data.

RATE

In the bond market, government bond yields appear to be in equilibrium. That of 10-year Treasuries is trading around 1.75% in Asian trade and the 10-year Bund varies little in the first transactions in Europe, around -0.40%.

EXCHANGE

On the currency side, caution on the Brexit front is illustrated by a decline in the pound sterling, which yields 0.12% against the dollar.

The greenback is stable against a basket of reference currencies including the euro, which trades around 1.11123 dollars.

OIL

The two crude benchmark contracts fell again after hovering around 1% on Thursday as slowing Chinese growth fueled fears for demand.

North Sea Brent yields 0.23% to 59.68 dollars a barrel and US light crude (WTI) loses 0.1% to 53.89 dollars.

(Edited by Jean-Michel Belot)