LONDON, April 10 (Reuters) - European shares hit a 10-week low on Tuesday as fresh concerns about global growth and pressure on some highly indebted euro zone countries hurt cyclical stocks, with charts for a major blue-chip index showing scope for yet further declines.
Financials, miners, automakers and energy sectors bore the brunt of the sell-off after trading in Europe resumed following the Easter holidays, reacting to Friday’s weak U.S. jobs report and Tuesday data showing no growth in France’s economy in the first quarter.
The FTSEurofirst 300 index of top European shares provisionally finished 2.3 percent down at 1.027.95 points, the lowest close since late January. The index has fallen more than 7 percent since hitting an eight-month high in mid-March and is up just 2.7 percent so far this year.
“Investors are in a risk-off mode, with the U.S. job numbers and the situation around Spain becoming an excuse for the sell-off. I expect the market to fall 3 to 5 percent in the next couple of weeks,” Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said.
“I would advise investors to take some more profits. If the market falls 10 to 15 percent, you could start buying again as you would expect the central banks to intervene to support the market. Focus on defensive sectors such as pharmaceuticals and food and beverages and companies that give high dividends.”
Europe’s debt problems prompted investors to sell out of banks, with the STOXX Europe 600 banking index down 4 percent. Italian banks were a major drag after the country’s bond yields rose again, and led Italy’s FTSE MIB down 5 percent.