European Markets Tumble As Financial And Auto Stocks Plunge

The pan-European STOXX 600 index dropped 0.5%, driven down by declines in financial and auto stocks. Notable losses included Societe Generale, BMW, and Volkswagen. Despite a global rally initiated by the U.S. Federal Reserve's easing signals, Europe's major markets took a hit, with German and French manufacturing data showing contraction.

Financial and auto stocks weighed European shares down on Thursday, bucking a global rally sparked by the U.S. Federal Reserve opening the door to easing in September. The pan-European STOXX 600 index lost 0.5% by 0825 GMT, after touching a two-week high in the previous session.

The banking sector fell the most, dropping 2.3% following Societe Generale’s 7.5% decline after the French lender reported its second-quarter results. The auto sector lost 2% following a 4.5% slump in BMW after reporting lower-than-expected quarterly profit margins in its auto business.

Volkswagen, Europe's top automaker, fell 2.4% after reporting a 2.4% drop in its second-quarter operating profit, while Daimler Truck lost 3.1% after cutting its full-year revenue outlook. Those results pulled the German DAX down 1.2%.