European markets traded lower Wednesday morning as global market sentiment took a turn for the worse.
The pan-European Stoxx 600 index was down 0.3% by mid-morning with the majority of sectors in negative territory.
The FTSE 100 was an outlier among major regional bourses, up 0.6% after the latest U.K. data showed the inflation rate dropped sharply to 1.7% in September, according to the Office for National Statistics. The steep fall from the 2.2% print seen in August adds to expectations that the Bank of England will cut rates in November.
Looking at individual stocks, shares of LVMH dropped 6.3% at the open Wednesday, making it one of the worst performers on the Stoxx 600, after the luxury group reported a 3% drop in third-quarter sales. The best performer was British hotel group Whitbread, up 3.7%, after it raised its interim dividend and announced a £100 million ($129.95 million) share buyback program.
The lower open seen for Europe’s major bourses follows declines on Wall Street Tuesday and comes as most Asia-Pacific markets traded lower overnight, with Japan’s Nikkei leading losses.
U.S. stock futures were calm Tuesday evening as Wall Street looked to see whether equities can be rebound to record highs this week; the S&P 500 and Dow hit all-time highs Monday. The earnings season continues, with Morgan Stanley due to report later today.
Shares of ASML will be watched closely Wednesday after the Dutch chip firm published financial results a day early, issuing disappointing sales forecasts.
European luxury stocks were among the pan-European Stoxx 600 index’s worst performers Wednesday after LVMH saw a drop in third quarter sales.
While the owner of Louis Vuitton and Moët Hennessy and a range of other high-end brands saw its share price drop more than 6% this morning, rival French luxury group and Gucci-owner Kering also saw its stock decline 1.5%.
French luxury house Hermes shares were down 1.3% Wednesday while British competitor Burberry’s stock was also down 1.3%, with luxury goods group Richemont down 1.1%. Italian luxury fashion brand Moncler shares were 1.5% lower.
European luxury brands have been hit by slowing demand in the Chinese consumer market, a source of burgeoning growth in recent years.
