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Europe: Share rebound loses steam, steel stocks gain on US move
[MILAN] European shares dipped in choppy trade on Monday as a poor update from Reckitt Benckiser hit consumer staples, though steel-makers rose after the United States outlined proposals for hefty import curbs.
Shares in Tenaris and Outokumpu - which have facilities in the United States - were the biggest gainers in Europe, up 3 per cent and 4.5 per cent respectively.
Their gains and an early rise in financial stocks helped Stoxx 600 post small gains at the open but the pan-European benchmark index was later dragged lower by a fall in consumer staple stocks. The index was down 0.6 per cent at its close.
Monday's decline took place after the Stoxx posted a 3.3 per cent gain last week when strength in corporate updates and a return of inflows into equity funds helped global equities rebound from a turbulent start to the month.
The index needs to rise around 7 per cent to climb back to the 2-1/2 year peak hit at the end of January.
Reckitt Benckiser missed profit expectations and its profit margins declined, hurt by a tougher pricing environment in developed markets and increased commodity costs. It said these issues would continue in the near term.
Reckitt Benckiser, the maker of Durex condoms, Lysol disinfectant and Mucinex cold medicine, fell 7.5 per cent. Shares in Unilever, Diageo, Nestle and Danone also declined.
Analysts at Investec affirmed their sell rating on Reckitt following the update, saying operating margin missed expectations and sales growth fell a little short of the more optimistic hopes given the strong flu performance from peers.
The US Commerce Department has recommended that President Donald Trump impose steep curbs on steel and aluminium imports from China and other countries ranging from global and country-specific tariffs to broad import quotas.
Morgan Stanley analysts said the European Commission could respond with measures to limit steel imports to the European Union, and that ArcelorMittal and SSAB would benefit the most from rising US spreads. SSAB rose 2.8 per cent.
German industrial giant Siemens rose as much as one percent before turning 0.3 per cent lower after announcing plans to list its healthcare division in the first half of the year.
Mercedes maker Daimler was a weak spot, down 2.1 per cent, after reports said US investigators probing Daimler had found that its cars were equipped with software which may have help them to pass diesel emissions tests.