Europe shares sink on mounting worries over global growth

miércoles 14 de enero de 2015 11:33 GYT

* FTSEurofirst 300 down 0.9 pct, mining sector down 5 pct

* Grim U.S. retail sales, World Bank outlook hit sentiment

By Blaise Robinson

PARIS, Jan 14 (Reuters) - European shares sank on Wednesday, knocked down by worries over the pace of global growth fuelled by grim U.S. retail sales data and as the World Bank cut its forecast for growth.

Shares in mining giants tumbled, with Glencore down 10.5 percent and hitting a record low, and Anglo American falling 9.6 percent, while copper prices tumbled 6 percent as investors slashed their exposure to the industrial metal. Copper mining represented nearly two-fifths of Glencore's operating profit in the first half of 2014 and about a quarter of Anglo's profit.

Major oil producers also retreated on Wednesday, tracking a recent sharp drop in oil prices. Royal Dutch Shell was down 2.4 percent, BP down 3 percent and Eni down 1.8 percent.

Even though lower commodity prices should help support the economy in the long term and lower input costs for companies in many sectors, investors worry that the benefits of cheaper oil and metals will be offset by anaemic economies and the threat of deflation.

"Inflation has basically disappeared in Europe, this is it. Prices are down in a lot of countries and salaries are going nowhere. There's a risk to see the drop in oil pushing the euro zone into deflation," said Daniel Larrouturou, deputy CEO of Paris-based Diamant Bleu Gestion.

"But we're not there yet, and a potential round of quantitative easing by the European Central Bank (ECB) could help avoid that."   Continuación...