Oct 18 Reuters - European shares fell on Monday after weaker-than-expected growth data from China hit luxury stocks, while a relentless surge in commodity prices fuelled worries about inflation spiralling out of control.
The pan-European STOXX 600 index fell 0.5% after an upbeat start to the quarterly earnings season drove its strongest weekly performance since March on Friday.
Asian stocks came under pressure after data showed China's economy hit its slowest growth in a year in the third quarter, hurt by power shortages, supply chain bottlenecks and major wobbles in the property market.
China-exposed luxury stocks including LVMH, Kering and Hermes fell about 3% each, also hurt by Chinese President Xi Jinping's call for expansion of consumption tax.
Sentiment is being driven by some of the data out of China, said JP Morgan Asset Management global market strategist Michael Bell. It is still worries about the slowdown in the real estate market really. Umicore was among the major laggards, falling 5.5% after it cut its earnings outlook to reflect a stronger than expected impact from the global semiconductor shortage.
Analysts are expecting European companies to report a near 47% jump in third-quarter profit, according to Refinitive IBES data. Those figures have been revised higher in recent days, helping STOXX 600 inch toward its August peak.
When we look at the outlook in the next 12 months, valuations may come down a little bit, but not enough to offset move higher that we see in earnings and that should be pretty positive, JPMorgan's Bell said.
European miners as well as oil and gas stocks were among the few gainers as crude futures rose past $85 a barrel and metal prices rallied.
The Hut Group rose 5.5% after the online retailer backed by SoftBank said it would remove its founder's golden share and seek a premium listing after its shares plummeted last week.
French biotech company Valneva shot up 32.3% after it reported positive results from a late-stage trial of its inactivated, adjuvanted COVID - 19 vaccine candidate.