Europe: Stocks slide with eyes on US tech earning

EUROPEAN shares extended losses for a third session on Tuesday, giving up earlier gains as technology stocks followed US peers into the red ahead of earnings from some big names, while London’s FTSE outperformed on a commodities boost. The pan-Europe Stoxx 600 index closed lower, with technology stocks down 2.3 per cent at six-week lows and banks dropping 2.3 per cent. The index had rallied up to 1 per cent earlier in the day, cheered by strong earnings from companies including Swiss bank UBS and shipping giant Maersk. This followed a 2 per cent plunge on Monday on worries of an economic slowdown in China and rapid US interest rate hikes. “Investors are back to fretting about economic growth, returning to the theme that dominated at the end of last week,” said Chris Beauchamp, chief market analyst at online trading platform IG. “Meanwhile... nerves about big tech earnings this week have come to the fore.” The tech-heavy Nasdaq slumped more than 2 per cent, with Alphabet Inc and Microsoft Corp falling more than 2 per cent each ahead of their results after the closing bell. Capping broader losses in Europe, miners rose 1.1 per cent recovering a sliver of Monday’s 6 per cent plunge, while energy stocks gained 0.9 per cent. This kept the FTSE 100 buoyed amid a continued rout for Germany’s DAX and Spain’s IBEX which lost more than 1 per cent. Among banks, HSBC fell 5.5 per cent after Europe’s biggest bank warned more share buybacks were unlikely this year. Spain’s Santander gained 6.2 per cent after quarterly profit beat forecasts. Credit Suisse Group, Barclays and Deutsche Bank are among other European banks set to report over the next few days. At the bottom of the Stoxx 600 was Swedish medical equipment maker Getinge which plunged 15.2 per cent after reporting a larger-than-expected drop in quarterly profit. Shares in French car parts supplier Faurecia slid 10.7 per cent, dragging down the auto index, with analysts pointing to worse-than-expected guidance issued by Forvia, the group born from its takeover of German rival Hella. Faurecia also said it plans to review its activities. Meanwhile, investor focus was on the US Federal Reserve meeting next week and comments from European Central Bank officials. The ECB should raise rates soon and has room for up to three hikes this year, ECB policymaker Martins Kazaks told Reuters. Money markets are pricing in more than 80 basis points of ECB interest rate rises by the year-end. REUTERS