Europe Markets

Europe stocks close sharply lower as luxury, tech and mining firms lead the losses; LVMH down 7%

Key Points
  • European stocks moved sharply lower on Wednesday, with the tech sector under particular pressure.
  • Banks and telecoms were the only two European sectors to notch gains.
  • U.S. stocks opened lower as rate rise fears and a tech sell off sparked investor jitters.

European stocks closed sharply lower Wednesday, amid a global sell-off for equities, with technology and mining stocks leading the losses.

The pan-European Stoxx 600 closed provisionally down by 1.46 percent. Tech and basic resources were the two biggest losers on aggregate, but most sectors struggled amid fears over global economic growth and rising interest rates.

Investor sentiment has taken a hit this week after an IMF report lowered its global gross domestic product forecast for both this year and next. In the United States, fears that the Federal Reserve is ready to push the cost of borrowing higher has also had a knock-on effect to global markets.

The FTSE 100 in London closed lower by around 1 percent while Germany and France's main markets both shed around 2 percent in overall value.

Looking at individual companies, shares of luxury firms filled the bottom of the Stoxx 600 Wednesday. LVMH ended down by 7.14 percent after reporting a slowdown in sales. Other luxury brands were also below the flatine, with Moncler off by 10.85 percent and Kering down by 9.62 percent. According to Reuters, Morgan Stanley cut its EU luxury goods sector rating to "underweight."

Wirecard sat at the bottom of Europe's main index after slipping more 14.2 percent. The German tech firm giving up all and more of Tuesday's strong gains.

On Wall Street, stocks sank Wednesday, led by a steep decline in tech shares as this month's sell-off continued.

The Dow Jones industrial average traded 400 points lower by the European close as Intel and Microsoft fell more than 1.5 percent each. The Nasdaq Composite dropped 2.3 percent.

Elsewhere, Brexit continues to be an area of focus for the market, as the U.K. government faces pressure to reach a divorce deal with the European Union before the end of the year. Britain's Society of Motor Manufacturers and Traders, a trade body representing the automotive sector, launched a contingency plan called the "Brexit Readiness Program" on Wednesday, aimed at protecting the industry's supply chain.

On the data front, U.K.growth numbers showed a pick up in economic activity over the summer. In the three months to August, GDP was 0.7 percent higher than the previous quarter, the Office for National Statistics said.