European auto stocks in reverse while China’s growth disappoints

A sales warning from Renault drove shares in European automakers and parts suppliers lower on an otherwise muted day for regional bourses.

Renault’s shares slid 12.2 per cent on Friday to their lowest since April 2013 after the French carmaker cut its sales and profit guidance for 2019. Tyremaker Michelin shed 1.3 per cent while Renault’s national rival Peugeot lost 1.4 per cent and Fiat Chrysler fell 0.8 per cent.

The Stoxx 600 index of European auto groups was down 1.3 per cent in afternoon dealings. The broader Stoxx 600 gauge tracking regional markets was 0.1 per cent weaker. London’s FTSE 100 shed less than 0.1 per cent.

Futures for the S&P 500 were fractionally higher, while those for the Nasdaq 100 were flat.

Earlier, Asian equity markets slipped after data from China showed the world’s second-largest economy expanded in the third quarter at its slowest pace in almost three decades.

China’s CSI 300 of Shanghai- and Shenzhen-listed names fell 1.4 per cent, while Hong Kong’s Hang Seng index nudged 0.5 per cent lower.

“[China’s] GDP figure was below, but rather close to the market consensus forecast, causing an initial rebound in the equity market,” said Gerry Alfonso, director at Shenwan Hongyuan Securities. “The market then seems to have shifted focus back to the current macro situation with some selling across the board as uncertainty in the [US-China] trade negotiations remains.”

In currencies, the pound was flat at $1.2886 after the announcement of UK prime minister Boris Johnson’s Brexit deal on Thursday sent cable on a wild ride.

The Northern Ireland’s Democratic Unionist party rejected the agreement “as it stands”, raising concerns over whether Mr Johnson can get it passed by parliament.

Parliament is due to debate the agreement on Saturday when MPs, unusually, will be sitting, the first time at the weekend since Argentina’s invasion of the Falkland Islands in 1982. The pound is expected to rally if a convincing deal is reached.

The Norwegian krone has taken a battering this week, hovering at its lowest against the euro in a decade. It was recently trading flat against the single currency at NKr10.219.

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