Europe open: Shares fall as US-driven rally ends; Bayer slumps

European shares fell sharply at the open, giving up gains driven by a post-US election bounce that drove tech stocks higher amid optimism the new administration would bring in business-friendly policies.

The pan-regional Stoxx 600 index was down 0.94% at 507.54 with all major bourses in the red as traders took profits and looked more closely at the possible impact of potential tariffs against China as promised by president-elect Donald Trump.

In economic news, wage growth in the UK slowed in the three months to September, but not as much as expected, according to official data.

Employee pay excluding bonuses rose 4.8% over the quarter, its lowest rate in more than two years. Meanwhile the unemployment rate rose to 4.3% in the three months to September from 4% in the previous quarter, versus expectations for a 4.1% increase.

In Germany, inflation was confirmed as rising to 2% in October from September’s 1.6%, driven by higher food and services prices.

On the equities front, shares in ConvaTec surged as the wound care specialist raised its guidance for 2024 following robust sales growth across its divisions.

BAE Systems rose as the arms maker held annual guidance and said its order book reflected demand from governments for weaponry amid increasing global tensions. The company said it expected to hit its upgraded underlying operating earnings growth target of 12 -14% this year on 2023's £2.7bn.

DCC shot higher as it announced plans to simplify its operations and focus on the energy sector. The sales, marketing and support services group also reported a rise in interim profit and lifted its dividend.

Shares in Drax also jumped on a positive trading update.

On the downside, shares in Bayer slumped as the German chemicals group lowered full-year operating earnings guidance and took billions in write-downs on agricultural markets in Latin America.

Reporting by Frank Prenesti for Sharecast.com