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Europe: Shares retreat as trade worries weigh on Wall Street
[MILAN] European bourses closed in negative territory on Thursday at the end of a session laden with corporate earnings and as worries over global trade tensions weighed on Wall Street.
The pan-European Stoxx 600 index fell 0.75 per cent, retracing from three-month highs while in New York, the S&P 500, the Dow Jones Industrial Average and the Nasdaq were down 1.2 per cent, 1.4 per cent and 1.3 per cent respectively.
"Global stocks are on the slide in the wake of a weak US open today, with trade fears and a strengthening dollar weighing on sentiment", said Joshua Mahony, a market analyst at IG.
Treasury Secretary Steven Mnuchin has arrived in Beijing for talks on tariffs but with state media saying China will stand up to the US, a breakthrough is viewed as unlikely, especially as the delegation is expected to leave as early as Friday evening.
Outside of an overall negative market sentiment, a series of disappointing earning updates also dragged European stocks down.
Smith & Nephew slumped 7 per cent after Europe's biggest artificial hip and knee maker cut its forecast for full-year underlying revenue growth after some markets softened and it saw a slowdown in its bioactives business.
"Following on from weak results from competitors, results across most product lines were slightly soft... However, Bioactives was the major disappointment," said UBS in a note.
Belgium's Bpost plunged 13 per cent, leading fallers on the Stoxx as it missed expectations and Norwegian media group Schibsted also declined 5.3 after its results disappointed.
Adidas fell as much as 6.8 per cent after the German sportswear firm posted sales growth slightly shy of analyst expectations.
Results elsewhere showed the negative impact of strength in the euro during the first quarter.
German drug and crop chemical Bayer cut its full-year guidance as a stronger euro weighs on the value of overseas revenues. Its shares edged up 0.35 percent.
Adverse currency moves also led to a 2 per cent revenue drop at healthcare group Fresenius and resulted in a lower-than-expected core profit for Belgian chemicals group Solvay.
Fresenius fell 1 per cent and Solvay was down 5.7 per cent.
Elsewhere, however, some well-received company updates provided support. Logitech rose 6.5 per cent and French utility Veolia added 2.6 per cent as its domestic water business returned to growth and international activities also showed double-digit growth.