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Europe: Shares dip to 2-week low as Carrefour, WPP results get frosty reception
[LONDON] European shares slid on Thursday as a flurry of uninspiring earnings updates from retailer Carrefour and advertiser WPP kept the mood downbeat, while broader jitters over tightening monetary policy spilled over into a new month.
The pan-European Stoxx 600 index fell 1.4 per cent to a two-week low, while Germany's DAX fell 2 per cent and Britain's FTSE felt the weight of Brexit uncertainty with a 0.8 per cent loss.
Results were squarely in focus, with shares in French supermarket Carrefour dropping 6 per cent after the group cut its dividend and gave a cautious 2018 profit outlook.
Many retailers have struggled in the face of Amazon's rise and the need to adapt to a tech-led world.
"If you're looking at companies like Amazon which are hoovering up market share ... you have seen some weaker performers," Jasper Reimers, senior analyst at Vertex Capital Group, said.
"On the whole, I would say it certainly hasn't been a bad (European) earnings season at all."
Plans by fast-fashion company Zalando to expand into two new markets were not met well by the market, with its shares also falling 6.1 per cent as investors assessed the impact of such heavy investment.
Elsewhere, Britain's Carpetright slumped nearly 22 per cent after saying that it was in talks with lenders about shoring up its balance sheet, following a profit warning at the end of January.
Advertiser WPP's shares dropped 8.2 per cent after it said that it would simplify its structure after posting its worst performance since the financial crisis as consumer goods firms cut their spending on advertising.
On the positive side, shares in beer giant Anheuser-Busch InBev jumped 2.2 per cent after its fourth quarter profit beat expectations thanks to a rebound in Brazil and savings from its 2016 purchase of SABMiller.
More broadly, equity markets continue to be dogged by concerns over higher bond yields, rising inflation and the potential for higher interest rates in the United States.
These worries were reignited on Tuesday when new Federal Reserve chief Jerome Powell struck a bullish tone on the strength of the economy.
Mr Powell spoke again on Thursday, saying however there was no evidence that the US economy was overheating. His comments helped Wall Street pare initial losses but had little impact in Europe.