European stocks hit two-week low as sell-off leaves few sectors unscathed

By Julien Ponthus and Helen Reid

LONDON (Reuters) - European shares hit their lowest in two weeks on Wednesday in a broadbased sell-off across oil, mining, technology and banking stocks amid renewed worries about a global economic slowdown and Italy's budget crisis deepens.

The pan-European STOXX 600 <.STOXX> lost 0.6 percent after a choppy session as commodities sectors weighed and Italian stocks sold off.

The STOXX and leading euro zone stock indexes <.STOX50E> hit their lowest since Oct 31 in early deals, recovering some ground later and ending the day near those levels as Wall Street turned lower as Apple led another decline in technology stocks.

European tech stocks <.SX8P> were down 0.6 percent with chipmaker AMS <AMS.S> sinking another 10 percent to the bottom of the STOXX 600.

The shares have lost almost a third of their market cap so far this month amid concerns about a weak U.S. holiday sales season after warnings from Apple and Qualcomm.

Italy's decision to stick to its growth and deficit plans in its re-submitted draft budget set the stage for a showdown with the European Union over breaking structural deficit limits.

It drove government bond yields up and sent Italy's FTSE MIB <.FTMIB> down 0.8 percent as bank stocks <.FTIT8300> fell 1.4 percent.

"Continued pressure on Italian government bonds could spark a major debt crisis, which could easily spread across the region," said David Madden, market analyst at CMC Markets UK.

"The clock is ticking for Theresa May, as she needs to convince her cabinet, and then the majority of the House of Commons to back her draft agreement regarding the UK withdrawal from the EU."

The oil and gas sector <.SXEP> fell 0.5 percent, paring earlier heavier losses as oil prices managed to recoup some of the ground lost following a 7-percent plunge the previous day on surging supply. [O/R] Still, the sector ceded its position as top-gaining sector year-to-date to healthcare.

Energy stocks have been one of the biggest contributors to the region's earnings growth this quarter, making the slide a significant concern for investors.

In London, the FTSE 100 <.FTSE> fell as Prime Minister Theresa May sought to convince her government to accept a draft European Union divorce deal that opponents say threatens the independence and unity of the United Kingdom.

Mining stocks <.SXPP> fell 2.9 percent as copper prices slid after weak China retail sales data reignited fears of a slowdown in the world's biggest metals consumer.

Dutch payments firm Adyen's <ADYEN.AS> shares lost 9.5 percent as traders said the stock had been left out of an MSCI index re-weighting, and was also being dragged down by Wirecard <WDIG.DE> which fell after results.

"Adyen didn't get included into the MSCI re-weights, which a lot of people were thinking they might, so there's some technical selling driving it," said Mark Taylor, sales trader at the Mirabaud Securities Global Thematic Group.

Wirecard shares fell to the bottom of the DAX after the firm hiked its profit target and reported a jump in third-quarter net earnings. Traders said the market was honing in on details in its free cash flow, and signs of slowing inorganic growth.

Iliad <ILD.PA> shares were among top gainers, up 9.6 percent after results showed good performance in the company's Italian unit, though overall it lost subscribers.

Gambling company GVC <GVC.L> shares hit the jackpot after a UK government ruling aimed at tackling problem spared the company a major cash outlay to former Ladbrokes shareholders.

Overall European earnings have been underwhelming this season, revealing growing margin pressure and concerns about growth and a slowdown in China.

"For 2019, we forecast low-single-digit and below-consensus EPS growth in Europe," wrote Barclays analysts.

They see earnings per share growing at 4 percent in the euro zone and 2 percent in the UK next year - significantly lower than the aggregate IBES Refinitiv estimates for around 10 and 8 percent respectively.

Mediaset <MS.MI> shares fell 6.9 percent, the heaviest fallers on the Italian index, after third-quarter earnings delivered a small beat, but Deutsche Bank analysts said consensus estimates were more likely to fall than rise.

(Julien Ponthus, Helen Reid and Josephine Mason; Editing by Peter Graff)