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Europe: Stocks falter as pharmaceutical sector falls
[LONDON] European shares dipped on Wednesday as poor corporate earnings in the pharmaceutical sector weighed on sentiment already soured by trade tensions, with Washington preparing tariffs on another US$16 billion of Chinese goods.
The pan-European Stoxx 600 ended the session down 0.2 per cent, with the European healthcare index leading losers, down 1 per cent.
Worries over global trade and tariffs continue to pressure euro zone stocks, with the Euro Stoxx index down 0.6 per cent so far in August.
"We are cautious on Europe, given the possible impact on growth from US trade measures, especially on export dependent Germany," Luca Paolini, chief strategist at Pictet Asset Management, said in a note.
Trading updates from Danish drugmakers Novo Nordisk and Lundbeck disappointed investors and their shares dropped 6 per cent and 14 per cent respectively.
Analysts at Berenberg said Novo Nordisk's earnings were "a fairly lacklustre set of results", while Jefferies analysts said sales of Lundbeck's key products were shy of consensus.
Britain's UDG Healthcare also took a hit, down more than 10 per cent after flagging weakness at its contract sales and patient support services operations.
Other blue-chip results also weighed, with Dutch food retailer Ahold Delhaize down 1.6 per cent.
Italian bank BPER Banca lost nearly 6 per cent, with one analyst citing disappointing quarterly interest income.
French supermarket chain Casino shed 6 per cent after broker Bernstein cut the stock to "underperform".
Among better-received trading updates, Nokian Tyres jumped 3.8 per cent after beating earnings expectations and Dutch bank ABN Amro added 3.5 per cent after reporting second-quarter profits.
Overall, though, the earnings season hasn't been as strong as in the United States; actual earnings growth for the MSCI EMU index is clocking in at 7.6 per cent, according to I/B/E/S data.
A strong US earnings season has also fuelled optimism about economic strength there, with S&P 500 firms seeing a 23.5 per cent rise in their April-June profits, according to Thomson Reuters data.