European stock markets edge lower after sell-off in mining and luxury sectors

European stocks settled lower on Tuesday as a lack of fresh details over China’s stimulus measures sparked a sell-off in sectors linked to the world’s second largest economy such as mining and luxury.
The Iseq rose 0.6 per cent as key stocks advanced. Kerry Group rose 0.5 per cent to €90.85 after the food giant said it expects its third-quarter results to be in line with market forecasts.
It was a good session for Ryanair, with the airline climbing 1.85 per cent to €16.52, while Cairn Homes added 2 per cent to €2.06. The homebuilder published a position paper on passive housing, an energy-efficient form of construction.
Bank of Ireland finished up 1.3 per cent at €9.57, with AIB closing flat at €5.02.
Kingspan was among the fallers, declining 0.7 per cent to €81.55.
The FTSE 100 recorded its worst day in two months led by losses in miners, while homebuilder Vistry plunged after cutting its annual profit outlook. The blue-chip index dropped 1.4 per cent, hitting a one-month low, while the mid-cap FTSE 250 index fell 1.1 per cent.
Most sectors in the FTSE 350 were trading in the red, driven by industrial metal miners that slipped more than 5 per cent as prices of base metals fell after initial optimism over top consumer China’s stimulus measures faded.
Other sectors such as banks and energy also saw heavy selling pressure, with the latter down 2.7 per cent, tracking lower oil prices.
Shares of Vistry dropped 23 per cent after the company cut its fiscal 2024 profit outlook after discovering one of its divisions had understated the cost of some of its developments. The homebuilder dragged the household goods and home construction sector down by 4.2 per cent to a three-month low. Crest Nicholson, Bellway, Persimmon and Taylor Wimpey were down between 1.1 per cent to 6.5 per cent.
Imperial Brands was the top percentage gainer on the FTSE 100 with a 4.1 per cent jump after it pledged to boost shareholder returns in its new financial year and forecasted growth of 20-30 per cent in so-called next generation products (NGP), which include vapes and other tobacco alternatives.
The pan-European Stoxx 600 index dropped around 1 per cent to touch a two-week low, before paring losses and declining 0.55 per cent.
Luxury firms such as LVMH, Kering, Burberry and Hermes, which draw a large part of their revenue from China, fell in the range of 0.6 per cent to 4.5 per cent.
Shares of spirits-makers Remy Cointreau and Pernod Ricard dropped 6.4 per cent and 4.2 per cent respectively as China announced provisional anti-dumping measures on brandy imports from the European Union.
Wall Street’s main indexes opened higher and stayed in positive territory in the early hours of trading as investors shifted their attention to the upcoming third-quarter earnings season and hints on the Federal Reserve’s future rate decisions.
Nine of the 11 S&P 500 sectors were trading in the green, with energy stocks losing over 2 per cent as oil prices fell after Monday’s rally.
The CBOE Volatility index, Wall Street’s “fear gauge”, retreated from Monday’s highs, but was still trading around one-month high.
The Dow Jones Industrial underperformed, pressured by an over 2.5 per cent drop in shares of Caterpillar. The materials sector fell 0.9 per cent to an over two-week low, as metal prices slipped on waning optimism over China’s stimulus measures.
Roblox dropped 6.6 per cent after Hindenburg Research on Tuesday disclosed a short position in the gaming platform.
Major banks are scheduled to kick-start the third-quarter earnings season this Friday.
Additional reporting: Reuters