Winners and losers among European stocks in the immediate aftermath of Donald Trump’s election victory swapped places on Friday, sending equities lower.
Industry groups that rallied as Trump defeated Hillary Clinton are losing ground, while those that were punished are recovering, on bets the moves went too far. Construction firms and drugmakers were among the worst decliners in the Stoxx Europe 600 Index, after rallying on Wednesday on speculation of higher infrastructure spending and less regulatory oversight, respectively. Banks and miners also slid. Bond-proxy sectors such as utilities and real estate firms rebounded from two days of losses.
The Stoxx 600 fell 0.3 percent at 11:34 a.m. in London for a second day of declines, as it failed to hold gains of as much as 0.7 percent at the open. That trimmed the benchmark’s biggest weekly advance since July. European equities are losing momentum after a three-day advance that broke their longest spell without gains since 1994.
“We’re taking a breather and beginning to think about the wider repercussions of” Trump’s win, said Witold Bahrke, a macro strategist at Nordea Investment Funds in Luxembourg. “You can say this is pro-growth and pro-equity, but it depends hugely on the concrete type of measures he takes. We are moving away from the hope phase to the delivery phase.”
After an initial selloff prompted by the surprise of Trump’s win wore off, European stocks on Wednesday were boosted by industries seen benefiting from the outcome. Heavyweights such as banks and health-care shares rallied, as did miners and construction. The Republican’s promises to increase public spending also spurred bets for higher inflation, dragging down bond-proxy sectors such as utilities and real estate. The Stoxx 600 is up 2.5 percent this week.
Money managers focused on emerging markets tumbled on Friday on concern the Federal Reserve will become more aggressive in raising rates under a Trump-led administration. Ashmore Group Plc and Aberdeen Asset Management Plc lost at least 5.7 percent. Lender Standard Chartered Plc, which gets most of its revenue from Asia, slipped 5.7 percent.
The implications of the vote outcome are “most significant in the emerging markets, which are a dangerous place to be not only in the coming weeks, but probably also the coming months,” said Bahrke. “Partly because of the protectionism tendency in the U.S. policy from now, but also because of the significant rise in the dollar, we might have focused too much on the pro-growth outcome of this election, and not enough on the flip side of the coin — much tighter financial conditions primarily driven by the dollar.”
A gauge of Stoxx 600 lenders declined from its highest level in almost eight months. Banks surged 7.8 percent in the past four days on bets of higher inflation leading to improved profitability, and an easing of financial rules. Unione di Banche Italiane SpA bucked the trend today, up 5.1 percent as Italy’s fifth-largest bank posted net income that beat estimates.
Gains in carmakers tempered losses in the benchmark on Friday. Fiat Chrysler Automobiles NV, which gets most of its revenue from the Americas, rose 3.9 percent to a six-month high after Trump selected a prominent critic of global warming to lead his environment agency’s transition team. BMW AG and Volkswagen AG added at least 1.8 percent.
Among other shares active on corporate news, Allianz SE rose 2 percent after it reported an increase in quarterly profit, boosted by its life and health insurance unit. Gamesa Corp. Tecnologica SA advanced 5.4 percent after raising its 2016 earnings forecast.
PostNL NV slid 4.6 percent after it rejected a 2.5 billion-euro ($2.7 billion) approach from Bpost SA, saying the proposal’s value is too low and potentially puts the Dutch company under the Belgian government control.
Diana Shipping Inc. (DSX) ended last trading session with a change of 13.75 percent. It trades at an average volume of 439.79K shares versus 1.16M shares recorded at the end of last trading session. The share price of $3.31 is at a distance of 69.74 percent from its 52-week low and down -46 percent versus its peak. The company has a market cap of $285.09M and currently has 86.13M shares outstanding. The share price is currently 30.88 percent versus its SMA20, 27.72 percent versus its SMA50, and 27.09 percent versus its SMA200. The stock has a weekly performance of 37.92 percent and is -23.91 percent year-to-date as of the recent close.
Noble Corporation plc (NE) recently recorded 4.31 percent change and currently at $5.08 is 14.16 percent away from its 52-week low and down -63.62 percent versus its peak. It has a past 5-day performance of 1.2 percent and trades at an average volume of 11.28M shares. The stock has a 1-month performance of -15.75 percent and is -50.66 percent year-to-date as of the recent close. There were about 243.22M shares outstanding which made its market cap $1.24B. The share price is currently -5.5 percent versus its SMA20, -10.05 percent versus its SMA50, and -36.66 percent versus its SMA200.