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Europe open: Stocks fall as investors look for fresh cues; pharmas under the cosh
LONDON (ShareCast) - (ShareCast News) - European stocks fell in early trade following healthy gains in the previous session, led lower by pharmaceuticals, as investors looked for fresh catalysts. At 0910 BST, the benchmark Stoxx Europe 600 index was down 1.1%, France's CAC 40 was 1.4% weaker and Germany's DAX was down 1%.
"Yesterday's gains could be summed up as drifting, no conviction and not likely to last. Until we get some clarity on the direction of China's economy and US monetary policy, expect markets to remain listless," said Jonathan Sudaria, a night dealer at London Capital Group.
On the corporate front, Volkswagen (Other OTC: VLKAF - news) shares were under pressure again as the probe into emissions-cheating in some of its diesel vehicles spread to Asia, with South Korea now saying it will investigate three of the German car maker's diesel models. The stock tumbled over 20% on Monday after the company admitted that it had made a mistake in trying to cheat on the emissions tests.
Pharmaceutical stocks were also on the back foot, tracking losses in the US after Democratic presidential candidate Hillary Clinton said on Monday that she plans to take on "price gouging" in the industry.
The Stoxx 600 healthcare index slumped 2.5%. In London, Shire (Amsterdam: QB8.AS - news) , GlaxoSmithKline (Other OTC: GLAXF - news) and AstraZeneca (NYSE: AZN - news) were among the worst performers on the FTSE 100.
Shares (Berlin: DI6.BE - news) in miner BHP Billiton (NYSE: BBL - news) dropped after it said it will undertake a global debt investor marketing effort across Europe, Asia and the US from 28 September as it considers raising new funds for general corporate purposes, including refinancing existing near-term debt maturities. The company said that subject to market conditions, it may consider the issuance of multi-currency hybrid capital instruments to institutional debt investors.
On the upside, HSBC rallied after Goldman Sachs (NYSE: GS-PB - news) added the stock to its 'Conviction buy' list.
The economic calendar is pretty light, but Eurozone consumer confidence is due at 1500 BST.
