Markets

European shares led lower by tech stocks; Steinhoff stumbles

MILAN: European shares fell on Wednesday following losses in other stock markets, with richly valued tech stocks falling under renewed pressure and miners hit by a slump in metal markets.

Declines were widespread with most sectors and country indexes trading in negative territory. The broader market was also weighed down by a 60 per cent plunge in heavily shorted furniture retailer Steinhoff on worries over accounting irregularities.

Tech stocks < .SX8P> and miners fell 1.1 and 0.8 per cent respectively, helping drag the pan-EuropeanSTOXX 600 benchmark index down 0.5 per cent by 0924 GMT.

Investors have been taking profits in the last few weeks following a strong year but in spite of the wobbles the STOXX remains up 6 per cent so far this year, helped by a continued strong economic recovery.

Tech stocks have come under pressure recently as worries that a chip market boom could soon come to an end has dented sentiment towards a sectors that in Europe has been the best performer so far this year.

Shares in chipmakers STMicro, AMS and Infineon all fell more than 2 per cent, while software firm SAP slipped 0.5 per cent, tracking losses in Asian peers and after a rebound of US tech stocks fizzled out.

Steinhoff fell 58 per cent, leading STOXX losers, after the furniture retailer said it would launch an investigation into accounting irregularities, its chief executive resigned and it postponed full-year results.

"We fear there is more to come," said Kepler Cheuvreux analyst Jürgen Kolb, who put his hold rating under review.

"It is absolutely unclear what the final outcome will be. The company has grown exceptionally with numerous acquisitions and the level of transparency on the numbers was extremely weak," he also said.

Shares out on loan in Steinhoff surged close record highs on Tuesday.

Other top fallers included UK's Saga, down 23 per cent to an all-time low after a profit warning, Elior Group , down 4 per cent following results, and Hays, down 3.7 per cent after a downgrade to "sell" at Deutsche Bank.

A takeover deal sent shopping centre Intu Properties surging 17 per cent. Hammerson said had agreed to buy Intu Properties in a deal valuing the smaller rival at about 3.4 billion pounds.

Cyclicals sectors were a weak spot with financials taking most points off the STOXX 600 index. Top faller among banks was Allied Irish Bank, down 2.2 per cent after a downgrade to hold at Investec, while Italy's Banco BPM and Germany's Commerzbank followed with declines of more than 1.7 per cent.

In the mining sector, London-listed mining giants Rio Tinto and Glencore both dropped more than 1 per cent.

Their declines came after copper prices fell sharply as investors wound in profits on concerns top metal consumer China could see a weaker first half of next year

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