(Bloomberg) — European stocks dropped the most in over three months, amid worries that President-elect Donald Trump’s policies will stoke inflation and that his plans to increase tariffs could hit growth in the region. The Stoxx Europe 600 Index closed 2.1% lower, the steepest one-day slide since Aug.
5. While all industry sub-indexes were in the red, miners dropped the most as iron ore sank and aluminum extended losses. Luxury also took a hit with bellwether stock LVMH shedding 4.
5%. Tech stocks outperformed, however, with Switzerland’s Temenos AG rallying as investors welcomed its new strategy. Among other individual movers, Bayer AG slumped as much as 16% to a 20-year low, as the pharmaceutical and consumer health company cut its profit outlook.
Vodafone Group Plc shares slid after it reported disappointing service revenue in Germany, its biggest market. While Trump’s election win has boosted the dollar and US stocks, his policies are expected to be less positive on assets elsewhere, and countries reliant on exporting to the US are likely to bear the brunt of his plans to hike trade tariffs. The Stoxx 600 is set for its worst performance versus the S&P 500 this year since 1995, while the euro is at a one-year low against the greenback.
Focus is now on the composition of the new cabinet, with Trump poised to pick two men with track records of harshly criticizing China for key posts. Analysts expect China to increase stimulus and allow the yuan to weaken to offset th.
