Europe close: Stocks drop after weak Chinese data

The benchmark Stoxx Europe 600 index finished 0.74% or 2.66 points lower to 355.81, Germany’s DAX was down by 1.17% lower and France’s CAC 40 by another 0.74%.

Data released overnight showed China’s mainland consumer price index rose 1.6% in September from a year earlier, missing expectations of a 1.8% increase.

This came a day after figures revealed that dollar-denominated exports in China dropped 3.7% in September from a year earlier, while imports fell 20.4%, marking their eleventh consecutive month of decline. Exports were better than expected but imports were weaker, raising doubts over domestic demand and compounding fears of a slowdown.

“Investors are apprehensive about the sluggish growth in China and the recent data released this week has added negative sentiment for the European trading session,” said Naeem Aslam, chief market analyst at Ava Trade.

Industrial production in the euro bloc declined 0.5% last month, down from the upwardly revised 0.8% climb in the previous month, According to figures from Eurostat.

On a year-on-year basis, production rose 0.9% compared with analysts’ expectations of a 1.8% increase and down from the upwardly revised 1.7% hike registered in the previous month.

“With China’s economy giving off renewed signals of distress and the Volkswagen scandal hitting business hard in Germany, today’s announcement of disappointing industrial production data will come as no surprise," said Dennis de Jong, managing director at UFX.com.

On the corporate front, semiconductor equipment maker ASML Holding tumbled after the company said it projects sequentially lower sales in the fourth quarter. In addition, its third-quarter earnings were a little short of analysts’ expectations.

Luxury goods retailers LVMH and Burberry, both of which have a high exposure to China, also came under pressure.

Brewer Diageo slipped after saying it has agreed to sell two of its wine businesses, including brands such as Blossom Hill and Yellow Tail, for $552m to US-based Treasury Wine Estates as it continues to sell off non-core assets.

On the upside, though, London-listed fund manager Hargreaves Lansdown rallied as investors welcomed its third-quarter update.