European Markets Pull Back On Weak Earnings

BRUSSELS/FRANKFURT/PARIS (Alliance News) – The European markets ended Friday’s session in negative territory. After a weak start to the day, the markets remained stuck in a sideways pattern for much of the session. Losses accelerated slightly in late trade, following the weak opening on Wall Street.

Investor sentiment took a hit after companies like Renault and BT Group reported disappointing financial results. Weak numbers from Swiss bank UBS also weighed on the bank stocks.

The pan-European Stoxx Europe 600 index weakened by 1.15%. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.73%, while the Stoxx Europe 50 index, which includes some major UK companies, lost 1.33%.

The DAX of Germany dropped 0.40% and the CAC 40 of France fell 1.07%. The FTSE 100 of the UK declined 1.00%, but the SMI of Switzerland finished higher by 0.02%.

In Frankfurt, industrial gases group Linde AG declined 2.18% despite a 2% increase in second-quarter operating profit.

Adidas climbed 8.56% after the company increased its full year guidance.

In Paris, Renault SA dropped 5.08%, despite reporting a 59% surge in first-half profit on increased volume and with a larger payout from its holding in Nissan Motor.

Air Liquide SA fell 1.69%, despite higher results. In London, International Consolidated Airlines Group weakened by 0.08%, despite reporting higher second-quarter profit.

British telecom firm BT Group PLC surrendered 1.82% after reporting weak results in its first quarter.

UBS decreased 2.87% in Zurich on concerns over client activity and margins in its wealth management division, despite reporting 14% higher profit in its second quarter.

However, peer Credit Suisse Group AG gained 3.14% after posting a profit in its second quarter, compared to last year’s loss.

Eurozone economic confidence strengthened unexpectedly in July to near a decade-high, survey data from the European Commission showed Friday. The economic sentiment index rose slightly to 111.2 in July from 111.1 in June. The score was forecast to fall to 110.8. This was the highest score since the 2007 financial crisis.

A measure reflecting the current economic situation in euro area rose a second straight month in July, results of a survey by the Bank of Italy and the Centre for Economic Policy Research said Friday. The Bank of Italy/CEPR Eurocoin indicator climbed to 0.63 from 0.62 in June. The reading remained at cyclically high levels, the bank said.

German inflation accelerated unexpectedly to a 3-month high in July on energy prices, preliminary data from Destatis showed Friday. Inflation, based on consumer prices, grew 1.7% annually, slightly faster than the 1.6% rise posted in June. Inflation was forecast to ease to 1.5%.

French consumer price inflation remained stable in July, provisional estimate from the statistical office Insee showed Friday. Consumer prices climbed 0.7% year-on-year in July, the same rate as seen in June and matched economists’ expectations.

France’s economic growth stabilized in the second quarter, first estimate from the statistical office Insee showed Friday. Gross domestic product expanded 0.5% sequentially, the same pace of growth as seen in the first quarter and in line with expectations.

Consumer confidence in the UK continued to deteriorate in July, the latest survey from GfK revealed on Friday with an index score of -12. That missed forecasts for a score of -11, and it was down from -10 in June.

Economic activity in the US increased in line with economist estimates in the second quarter, according to a report released by the Commerce Department on Friday. The report said real gross domestic product climbed by 2.6% in the second quarter after rising by a downwardly revised 1.2% in the first quarter.

Economists had expected GDP to increase by 2.6% in the second quarter compared to the 1.4% growth that had been reported for the previous quarter.

A report released by the University of Michigan on Friday showed consumer sentiment in the US deteriorated by slightly less than initially estimated in the month of July. The report said the consumer sentiment index for July was upwardly revised to 93.4 from the preliminary reading of 93.1. Economists had expected the index to be unrevised.

Copyright RTT News/dpa-AFX

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