Europe close: China worries send shares lower

(Sharecast News) - European markets closed firmly in the red on Friday as China's property sector woes, rising bond yields and worse-than-expected UK retail sales data all dampened the mood. The pan-European Stoxx 600 index finished at 446.95 points, down 4.24 or 0.94%, with all major regional bourses lower on the day. Investors were spooked from the outset when Chinese property giant Evergrande finally buckled under the weight of its massive debt pile and filed for Chapter 15 bankruptcy in the US as it tried to organise a restructure.

Guangzhou-based Evergrande, thought to hold more than $300bn in debt, defaulted on its repayments back in 2021, prompting a string of defaults at other building companies.

China-exposed shares were under pressure, with miners, all betting on a post Covid-lockdown boom in the country, in the red. Antofagasta and Anglo American were both lower in early trade.

On bond markets the US 30-year yield hit a 13-year high, while UK and German yields were also on the rise after Federal Reserve minutes which indicated further monetary tightening in the US.

Brent crude oil prices looked snapped seven straight weeks of gains as worries over the Chinese property market and fears of interest rate rises hit sentiment.

In economic news, eurozone inflation slowed again in July, data from the European Union showed on Friday, raising hopes that the European Central Bank may slow its cycle of rate hikes.

Consumer prices increased by 5.3% in July versus 5.5% in the previous month, said statistics agency Eurostat. Core inflation, a key metric which excludes volatile items like food and energy, was confirmed flat at 5.5% from initial estimates

However, there was a pick up in services inflation to 5.6% from 5.4%, and economists said the "stickiness" would still be a worry for the ECB as wages continued to rise.

In equity news, shares in supermarket chain Dino Polska fell as the company missed half-year earnings estimates.

DocMorris shares surged as the Swiss online pharmacy narrowed half-year losses and noted a pick up in its e-prescription rollout.

Reporting by Frank Prenesti for Sharecast.com