Europe: Shares slip amid downbeat earnings reports; UK stocks outperform
EUROPEAN stocks edged lower on Tuesday as a slew of downbeat earnings and higher government bond yields outweighed gains in energy shares and slight easing of concerns about risks stemming from the Middle East conflict.
The pan-European Stoxx 600 index slipped 0.1 per cent, while the blue chip index ended flat.
US President Joe Biden is set to make a high stakes visit to Israel on Wednesday to show support for its war on Hamas.
“This just gives a picture of markets that is betting on the fact that this (conflict) isn’t going to get too much worse,” said Daniela Hathorn, senior market analyst at Capital.com.
“US diplomacy is going to play its part and it will remain as kind of a very controlled and localised issue that won’t impact greater markets.”
Construction and materials led sectoral declines, down 0.9 per cent.
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The European Commission said it was carrying out unannounced antitrust inspections in the construction chemicals sector in several member states, where companies were suspected of anti-competitive behaviour.
Pressuring stocks, euro zone bond yields rose further after US retails sales beat estimates.
While geopolitical tensions have gripped the market’s attention, investors also remain focused on the policymakers’ commentary for clues on the interest rate action from both the US Federal Reserve and the European Central Bank.
Energy shares cushioned the benchmark index to add 0.3 per cent, tracking higher crude prices.
UK’s FTSE 100 rose 0.6 per cent after data showing a slowdown in Britain’s regular wage growth supported hopes of a pause in the Bank of England’s tightening cycle.
Among individual stocks, Ericsson dropped 5.9 per cent to the lowest in six years after the Swedish network equipment provider’s fourth-quarter guidance missed expectations and the company flagged uncertainty about recovery of its mobile networks business.
Rival Nokia’s shares fell 2.8 per cent, dragging the broader telecoms index down 0.8 per cent.
Nordic Semiconductor slumped 20.1 per cent to the bottom of Stoxx 600 as the Norwegian chip maker’s fourth-quarter revenue forecast missed expectations.
The aerospace and defence index was the top sectoral gainer, up 1.2 per cent, as Rolls-Royce climbed 1.0 per cent after the British engineering company axed up to 2,500 roles.
Umicore jumped 13.0 per cent to the top of the euro zone blue-chip index after the Belgian chemicals and battery materials group updated its mid-term capital spending outlook. REUTERS
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