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Euro zone business activity slowed in November
Tech, consumer staples biggest drag on STOXX 600
Vodafone CEO to step down; shares reverse early gains
(Updates prices; adds details and comment)
By Amruta Khandekar
Dec 5 (Reuters) – European shares slipped on Monday after data showing a decline in euro zone business activity fanned recession fears in the region and as investors assessed uncertainty over the easing of stringent COVID-19 curbs in China.
The region-wide STOXX 600 was down 0.2%. The index notched gains for the seventh straight week on Friday, helped by China-led optimism and easing worries over aggressive interest rate hikes.
Still, a partial easing of the world’s toughest COVID-19 curbs sowed confusion across China on Monday, although investors cheered the prospects of a broader policy shift in the wake of historic protests last month.
Most of the STOXX 600 sectors were in red, with technology and consumer staples being the biggest drag in the index.
Energy shares slid 0.3%, while miners added 2.1% as prices of base and precious metals rose on hopes of demand from China, the world’s top consumer.
“The fact that there’s an uneven easing of COVID controls has helped oil prices a little, but we’re not seeing that really reflected too much in the share prices of the energy giants because it’s unclear exactly how those restrictions will continue to be relaxed,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Data showed euro zone business activity declined for a fifth month in November, suggesting the economy was sliding into a mild recession.
In company news, shares of Vodafone Group reversed early gains after the British mobile operator said Chief Executive Officer Nick Read would step down at the end of this year and be replaced on an interim basis by finance chief Margherita Della Valle. Shares of Credit Suisse gained 5.5%. Investors including Saudi Arabia’s crown prince and a U.S. private-equity firm run by a former Barclays CEO have shown interest in investing $1 billion or more in Credit Suisse’s new investment banking unit, the Wall Street Journal reported on Sunday. (Reporting by Amruta Khandekar; Editing by Vinay Dwivedi and Sherry Jacob-Phillips)