European shares hit two-week low as dismal earnings add to risk-off mood
Reuters
Published Oct 19, 2023 08:22
Updated Oct 19, 2023 17:26
By Amruta Khandekar and Shristi Achar A
(Reuters) -European shares lost ground on Thursday as a raft of downbeat corporate earnings, including from packaged food giant Nestle, worsened the risk-averse mood, driven by jitters around the Middle East war and uncertainty over interest rates.
The pan-European STOXX 600 fell 1.2% hitting a two-week low, in a broad-based selloff.
European stocks have seen steep declines this week, sliding for the third straight session, hit by Middle East tensions and interest rate worries following robust U.S. economic data and mixed earnings reports.
Geopolitical tensions continued to mount as Israel pounded Gaza with more air strikes on Thursday. British Prime Minister Rishi Sunak followed U.S. President Joe Biden on visits to demonstrate Western support for the war against Hamas.
Further pressuring equities, U.S. Treasury yields jumped to multi-year highs, awaiting commentary by Federal Reserve Chair Jerome Powell, with the bond sell-off pushing Italian bond yields to an 11-year high. [US/] [GVD/EUR]
"A mix of inflation worries plus U.S. resilience is clearly the main driver why markets have repriced again the odds of another rate hike by the Fed later this year," said Thomas Hempell, Head of Macro & Market Research at Generali (BIT:GASI) Investments.
"(There's) uncertainties about the behaviour of the Fed, and clearly that overlaps with the Middle East tensions."
Rate-sensitive real estate firms led sectoral declines, dragged by a 14.3% fall in Britain's Rightmove Plc (LON:RMV) after U.S. real estate firm CoStar agreed to buy the property portal's rival OnTheMarket.
Nestle dropped 3.4% after the Swiss consumer giant posted lower-than-expected nine-month sales growth as higher product prices made shoppers balk.
France's CAC 40 index slid to a seven-month low with Renault (EPA:RENA) down 7.3% after the French carmaker's third-quarter revenue missed analysts' expectations.
Nokia (HE:NOKIA) lost 6.4% as the Finnish telecom gear group announced plans to slash jobs after posting a drop in its third-quarter sales.
The stock was among top losers on Finland's OMX HELSINKI 25 index which dropped 1.6% to a three-year low.
Roche Holding (SIX:ROG) lost 4.4% as the drugmaker's third-quarter sales were hit by lower demand for COVID-19 products.
Europe's technology sector was the only sector in the green, up 0.5%, with SAP jumping 5.1% after reaffirming its full-year cloud business revenue outlook.
Pernod Ricard (EPA:PERP) gained 4.8% after the French spirits maker said it expected to grow sales over the coming year, despite a difficult first quarter.
Get The App
Britain's Rentokil Initial (LON:RTO) slumped 18.6% to the bottom of the STOXX 600 after the pest control firm flagged weaker demand in North America, its biggest market.
Meanwhile, UK's London Stock Exchange said it was currently investigating an incident and that only FTSE 100, FTSE 250 and IOB securities were available for trading.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.