European Stocks Tumble Amid U.S. Clampdown on Tax Inversions

LONDON ( The Deal) -- European stock indices plunged on Tuesday amid profit warnings from high-profile companies and fears that a U.S. clampdown will stem the tide of American deal-making in Europe.

In London, the FTSE 100 tumbled 1.17% at 6,693.82. In Frankfurt, the DAX was down 1% at 9,651.67. The CAC in Paris fell 1.53% at 4,371.62.

Meanwhile, declines in Markit Economics purchasing managers' indices for both manufacturing and the services sector in the eurozone in September painted a picture of economic weakness.

Investors are looking for a slight rise in Markit Economics' PMI index for the U.S., which will be out at 9.45 a.m. EDT.

In London, U.K. pharmaceuticals and health care companies that either were or are targets of U.S. bids plunged after the Treasury and the Internal Revenue Service announced initiatives to curb tax inversions Monday. Treasury Secretary Jack Lew said the Obama administration also wanted congressional action to stop U.S. companies moving their headquarters elsewhere to cut their tax bills.

Pfizer  (PFE) bid target AstraZeneca (AZN)  fell by well more than 5%; Smith & Nephew, which was briefly a target of Stryker (SYK) , declined more than 6%; and Shire (SHPG) , which in July agreed to a takeover by AbbVie (ABBV) , was down almost 7% on concern the deal may collapse.

In London, sugar producer Tate & Lyle fell almost 16% after warning that its first half had been challenging and delivering a full-year profit forecast that fell below analysts' expectations.

If you liked this article you might like

IPOs That Should Be on Your Radar

New Teva CEO Just Added Nearly 13% to Company's Market Cap Without Even Starting