Values slide on Chinese stimulus data

European stocks fell as China’s minister for finance Lou Jiwei dampened speculation his government will boost economic stimulus. Commodities producers dropped the most among 19 industry groups.

National benchmark indexes slipped in 17 of the 18 western-European markets yesterday. The UK's FTSE 100 Index lost 1 per cent, while Germany's DAX fell 0.5 per cent and France's CAC 40 each dropped 0.6 per cent. Italy's FTSE MIB Index declined 1.5 per cent, the most among the 18 markets.

In Ireland traders said the Iseq had a quiet day.

CRH was one of the big movers of the day, closing up 2.1 per cent at €18.35. The building materials group was dropped from the Euro Stoxx 50 last Friday but it emerged yesterday that it is to offload its share in a builder merchanting chain in France by the end of this year.

C&C closed the day up 1.3 per cent at €4.374. Traders said it is benefitting from speculation that it might become a target amid the takeover war brewing between SAB Miller, Heineken and AB InBev.

Bank of Ireland finished down 3.4 per cent at 30.9 cent after a strong run recently. Negative sentiment across the airline sector in Europe meant Ryanair dipped lower by 2.9 per cent to €7.345. The company will hold its agm in Dublin on Thursday.

There were contrasting fortunes for two of the property real estate investment trusts. Green Reit closed up 2.7 per cent at €1.366 while Irish Properties Reit finished down 1.7 per cent at €1.106.

UK stocks fell the most in more than 10 weeks. Tesco slumped the most since January 2012 after saying it overstated its first-half profit estimate. Grocers Wm Morrison Supermarkets and Sainsbury each lost more than 1.5 per cent.

A gauge of London-listed mining companies declined the most in 14 months after China’s minister for finance’s negative indication on stimulus.

Tesco dropped 12 per cent to 203p, its lowest price in 11 years. The supermarket chain began an investigation into its accounting practices after overstating expected profit by £250 million. The company had said operating profit for the period would be about £1.1 billion.

Morrison slipped 1.7 per cent to 179p, while Sainsbury fell 1.9 per cent to 278.8p.

A gauge of mining companies on the broader FTSE 350 Index fell 3.8 percent, for a fifth day of losses. Glencore slipped 4.9 per cent to 341.9p, its largest drop since July 2013. BHP Billiton declined 3.5 per cent to 1,730.5p, extending its losing streak to 12 days.

Cermaq ASA jumped the most since May 2013 after Mitsubishi offered to buy it. Merck KGaA rose 4.4 per cent after agreeing to buy Sigma-Aldrich.

"It looks like the Chinese government recognises that the economic boom is over and the country is settling down to a lower level of growth," said Andrea Williams, who helps oversee £50 billion as head of European equities at Royal London Asset Management in London.

“The Tesco announcement is quite a staggering amount. It will probably take them a long time to turn their operations around,” she added.

Basic-resources companies in the Stoxx 600 fell 3.1 per cent as a group to their lowest level since June. Anglo American lost 3.3 per cent to 1,423p and Glencore dropped 4.8 per cent to 342.1p. Rio Tinto Group slid 3.9 per cent to 3,054.5p.

Carmakers also declined. Bayerische Motoren Werke AG dropped 2.7 per cent to €86.60. Continental AG fell 3.5 per cent to €159.45. US stocks fell in early trading, led by a plunge among small companies.

Yahoo! dropped 2.3 per cent to lead the Dow Jones Internet Composite Index to a one-month low.

Alibaba Group slid 2.1 per cent after surging in its trading debut of September 19th. – (Additional reporting by Bloomberg)