You are here
Europe: Shares slip as Trump tweet hits drugmakers
[LONDON] European shares fell on Tuesday as shares in big international drugmakers were hit after US President Donald Trump tweeted about lowering drug prices.
Also weighing were companies such as Casino and Aggreko which reported disappointing results, but merger talk boosted shares in Italian TV tower firms.
The STOXX 600 fell 0.3 per cent, setting its fourth straight session of losses. The pan-European index however remains close to its 15 month peak hit last week on the back of a rally fuelled by a brighter economic outlook and a strong earnings season.
The region's healthcare index was the top drag to the STOXX, down 1 per cent, after Mr Trump said he was working on a new system to increase competition and bring down drugs prices.
Sector heavyweights such as Novartis, Roche, Shire and Sanofi all fell between 0.8 and 2.3 per cent.
The three biggest fallers on the STOXX all reported results, with Aggreko tumbling 12.9 per cent after the British temporary power provider reported lower revenues and gave a gloomy outlook for this year.
French retailer Casino Guichard and bookmaker Paddy Power Betfair both fell more than 5 per cent following poor earnings updates.
Data from Germany added to the downcast mood on Tuesday as figures showed that Europe's largest economy saw industrial orders fall 7.4 per cent in January, their biggest monthly fall in eight years due to a slump in domestic and euro zone demand. Europe's industrial goods and services index ended down 0.1 per cent.
Italian TV towers companies EI Towers and Rai Way both rose 5.3 per cent after local newspaper Il Messaggero said Rai Way had mandated Citi to examine a possible takeover of its rival after a failed attempt to merge in 2014.
EI Towers, which is controlled by broadcaster Mediaset, said it was not aware of any offer.
Other company updates drove gains, with Just Eat rising 4.6 per cent after the online food delivery company posted nearly doubled its earnings, while French telecoms group Iliad gained more than 1 percent after a core earnings rose.
The earnings season in Europe has so far been relatively strong, with 55 per cent of companies in major regional markets posting earnings beats, according to Eikon data.
Traders said market participants were also looking ahead to the US Federal Reserve's interest rate decision later in the month.
"We are still quite confident in European markets ... There's further scope for a bit of a push but we think there's a bit of a lack of a volume and market participation just because everybody's sitting on the sidelines waiting for the imminent announcement from the US," said Berkeley Capital trader John Moore.