LONDON
(Reuters) - European shares fell on Tuesday following disappointing results
from bluechips Ericsson and Lufthansa, while scaled-back expectations of
monetary
tightening by major central banks spurred some profit-taking in
financials.
The
pan-European STOXX 600 was down 0.3 percent as the basic resources sector fell
more than 1 percent.
Ericsson
dropped 11 percent after cutting its forecast for the mobile infrastructure
market and reporting a wider than expected loss, a further blow to a company
that is undertaking cost cuts.
"A more
challenging market and consensus estimates likely to fall significantly for
2017, we believe, will weigh," said UBS analysts.
Nokia shares
fell 2.9 percent as investors read across to the Finnish mobile equipment
maker.
Banks were
down 0.5 percent, after comments from Federal Reserve and European Central Bank
policymakers that pointed to a slower rate of tightening on both sides of the
Atlantic than many investors were expecting.
Zalando
weighed on the retail index after it reported slowing sales growth. Europe's
biggest online-only fashion retailer said capacity issues at new warehouses
held them back.
Zalando
launched a loyalty program, Zalando Zet, which analysts at Baader Helvea said
was its answer to Amazon Prime.
The broader
euro zone earnings picture was expected to weaken slightly in the third quarter
as analysts see a stronger currency likely weighing on the bloc's large
exporting companies.
"We do
think that the scope for earnings to beat expectations has been reduced due to
the currency headwinds - historically euro weakness has provided a driver for
earnings beats and with that removed, expectations may be more difficult to
surpass," said Edward Park, investment director at Brooks Macdonald.
German
airline Lufthansa fell 2 percent from 10-year highs, the worst DAX performer,
despite upping its profit forecast after a bumper summer of bookings.
Traders had
expected the stock to rise 1 to 2 percent. Analysts at Liberum said cautious
second-half comments from management might explain the move lower.
UK peers
International Consolidated Air and EasyJet were among top FTSE 100 losers.
Norwegian
fertilizer company Yara fell 4 percent after its quarterly earnings were dented
by a squeeze in margins.
"We
believe this has been Yara's darkest quarter and see an improving trend with
urea prices ticking up in the U.S. and Egypt recently," said Liberum
analysts.
Among shares
boosting the index, British spread-betting firm IG Group was up 8 percent,
leading gainers after reporting an increase in annual profit that beat
analysts' estimates.
Britain's
second largest listed property developer British Land jumped 2.7 percent and
was among the top performers on the STOXX 600 after announcing a 300 million
pound share buyback.
Analysts at
Morgan Stanley last week predicted European share buybacks would accelerate as
corporates react to a happy combination of better economic growth and solid
balance sheets.
0 Comments