European markets closed lower on Monday as car manufacturers faced challenges, leading to notable declines in stock prices. Companies like Stellantis, the owner of Fiat, and Aston Martin saw sharp drops in their shares due to concerns about weaker profits stemming from increased competition in China’s market.
In London, economic sentiment took a hit with the release of revised GDP figures by the Office for National Statistics showing lower-than-expected growth between April and June. The FTSE 100 ended the day 1.01% lower at 8,236.95 points, reflecting the broader negative trend in stock markets.
Dan Coatsworth, an investment analyst at AJ Bell, noted the swift change in market sentiment following last week’s strong showing, especially as Chinese stimulus measures boosted confidence. However, this week started with a retreat in US and European markets, with only a few stocks like BP and Hikma Pharmaceuticals showing any significant progress.
Across Europe, major indexes mirrored the weaker start in China, with the Cac 40 down 2% and the Dax index 0.68% lower at closing. Sterling made gains against the dollar amid expectations of further interest rate cuts by the Federal Reserve, trading at 1.340 US dollars and 1.202 euros.
In company news, Aston Martin’s shares plummeted by 24.5% after the luxury carmaker warned of lower annual earnings and reduced vehicle production due to supplier disruptions and weak demand from China. Meanwhile, Rightmove experienced a 7.7% drop in shares as takeover talks with REA Group fell through, valuing the online property platform at around £6.2 billion.
Mulberry initially faced a decline in share prices following a report of slumping sales, but saw a turnaround after receiving an £83 million takeover approach from Frasers Group. This led Mulberry’s shares to close up by 5.5% at 124p.
The price of oil edged higher as tensions rose in the Middle East following Israeli attacks in Lebanon, with a barrel of Brent crude oil closing at 72.39 dollars (£54.00) in London.
The FTSE 100 saw BP, Hikma Pharmaceuticals, AB Foods, Rolls-Royce, and Next among the top gainers, while Rightmove, Smiths Group, Intermediate Capital, Frasers, and easyJet were the biggest losers.
Overall, the market volatility and challenges faced by car manufacturers contributed to a downbeat trading day for European markets with various factors impacting stock performances across different sectors.