Brewer InBev triggers retreat for European shares
Reuters
Published Oct 25, 2019 10:07
Brewer InBev triggers retreat for European shares
By Agamoni Ghosh and Lisa Pauline Mattackal
(Reuters) - European shares fell for the first time this week on Friday, as a 10% slide in shares of brewing giant Anheuser-Busch InBev sent a shiver through investors worried about the outlook for growth and the prospect of months more wrangling over Brexit.
The pan-European STOXX 600 (STOXX) dipped 0.2%, but was still on track to end a busy week of corporate earnings higher after a handful of industry heavyweights topped low market expectations.
The food and beverage sector (SX3P) led losses on Friday, however, after Anheuser-Busch InBev (BR:ABI) came in below analysts' forecasts for quarterly profit and cut its forecasts for improvement in its bottom line this year.
Shares of German telecoms operator 1&1 Drillisch (DE:DRIG) and its parent company United Internet (DE:UTDI) also tanked after the former's request to review prices under an agreement with rival Telefonica (MC:TEF) Deutschland (DE:O2Dn) was rejected.
"Today's moves seem to have trimmed some of the progress we have seen on the week," said Ken Odeluga, an analyst with City Index in London.
"You have a mechanical effect from that 10% decline in AB InBev but you can't really generalize. We may not see a stellar earnings season but with expectations so low there will be more beats for sure."
On the bright side, France's CAC 40 (FCHI) outperformed as Gucci owner Kering (PA:PRTP) jumped 8%, while Italian jacket maker Moncler (MI:MONC) rose 7%. The companies joined other luxury labels in easing fears of a major third quarter sales hit from the protests in Hong Kong.
Limiting those gains was a 20% fall in shares of entertainment company Ubisoft (PA:UBIP), which lost roughly a quarter of its value after cutting its 2020 earnings guidance.
Among banks, Spain's Banco Sabadell (MC:SABE) and Britain's Barclays (L:BARC) both rose after reporting better-than-expected third-quarter earnings.
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British housebuilders (FTNMX3720), which are considered among sectors most exposed to the domestic economy, dipped 0.3%in their fifth straight session of losses.
Investors now await the European Union's response to a British request to delay Brexit again and a summit in Chile where U.S. President Donald Trump hopes to finalise a partial trade deal with his Chinese counterpart Xi Jinping.
Written By: Reuters
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