(Businesshala) – European shares fell flat on Thursday as travel and leisure limited gains in miners, while ending the month down more than 3% on concerns about a slowing global economy and high inflation.
The all-sector STOXX 600 index was down 0.05%, miners gained 2.0% and travel stocks were down 2.2%.
European stock benchmarks ended September with a loss of 3.4% after a seven-month winning streak, as rises in government bond yields drove investors out of high-growth sectors such as technology into financially sensitive banking and energy stocks .
“The market’s recent move suggests a rotation is underway in favor of sectors and assets that benefit from consumption shifting from goods to services,” BCA analysts said in a note.
“Given that we do not expect rising interest rates to have a detrimental effect on the real economy in the coming 12-18 months, we recommend that investors maintain a moderately overweight allocation to stocks.”
A growing number of risks, including a tough stance by the US Federal Reserve, supply-chain bottlenecks and financial troubles at Chinese property developer Evergrande, weighed on sentiment this month, even as investors bet on a stagnant European economy.
The defensive-heavy Swiss market is one of the biggest falls this month, while banking-heavy Spanish and British indices remained upbeat.
Among individual stocks, Sweden’s H&M was down 3.4% after the retailer said sales were hit by supply disruptions in September.
Spirits maker Diageo Plc gained 1.2% after forecasts to boost operating margin hit a record high as people opt for premium brands.
“The company (Diageo) had said cost pressures were mounting, but they were manageable for the time being, helping push shares to a new record high. It was a glass,” said Michael Hesson, chief market analyst at CMC Markets UK. Must be worth lifting.”
Swedish cloud communications services provider Cinch rose 3.1% after saying it has agreed to buy cloud-based email delivery platform PathWire in a deal worth about $1.9 billion.
British online fashion retailer Boohoo, down 15.1%, warned that freight inflation and higher wages for its distribution center staff would hit full-year profit margins.