European equities fell for a second straight session to a one-week low on Wednesday, with commodities-related shares coming under further selling pressure as prices of copper and crude oil slipped.
The pan-European FTSEurofirst 300 index was down 2.2% at its lowest level in around a week, extending losses from a 1.3% slide in the previous session.
Commodities-focused stocks bore the brunt of the sell-off, with the STOXX Europe 600 Basic Resources index dropping 4.9% after copper prices fell on persistent concerns about slowing demand in top consumer China.
The European oil and gas index also slipped 2.8%, tracking a decline in oil prices that were hit after top exporter Saudi Arabia ruled out production cuts and industry data showed a further build in U.S. crude stockpiles.
Shares in miners such as Anglo American (AAUKY), Glencore (GLCNF), BHP Billiton (BHP), and oil majors BP (BP) and Royal Dutch Shell (RDSA) all fell sharply.
“The upside potential for commodity prices and commodity-related stocks is limited as there is still a lot of excess supply of commodities. It’s not a good time to increase your exposure to the sector,” said Commerzbank economist Peter Dixon.
Standard Chartered also fell 4.1%, extending the previous session’s 6.7% drop after it reported a slump in profit, as Bank of America Merrill Lynch, Deutsche Bank and Nomura cut their target prices on it.
However, shares in Wolters Kluwer rose 6.4%, the top gainer in the FTSEurofirst 300 index, after the Dutch business information and publishing company reported slightly better-than-expected results as growth in North America and Asia Pacific offset weakness in Europe.
According to Thomson Reuters StarMine data, 55% of the companies on the European STOXX 600 index have met or beaten analyst forecasts with their fourth quarter results so far, while 45% have missed market forecasts
Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2%, slipping further from Monday’s six-week high.
Tokyo’s Nikkei index closed down 0.9% on the lower oil prices and a stronger yen. Chinese shares bucked the trend, with the CSI 300 index of the largest listed companies in Shanghai and Shenzhen closing up 0.7%, led by industrial and infrastructure stocks.