Results drive sharp moves in European stocks
Reuters
Published Jan 11, 2018 09:40
Results drive sharp moves in European stocks
By Helen Reid
LONDON (Reuters) - European share trading got off to a hesitant start on Thursday as concerns over protectionism and a bond market sell-off made the breakneck New Year rally in equities fizzle out.
Results drove the bulk of stock moves, with some disappointments weighing heavily.
The pan-European STOXX 600 (STOXX) and euro zone equities (STOXXE) dipped 0.1 percent, recovering from sharp losses in the previous session when jitters over a report that China was considering slowing purchases of U.S. Treasury bonds spilled over into stocks.
A Chinese regulator on Thursday said the report may be "fake".
Britain's FTSE 100 (FTSE) meanwhile touched a fresh record, its third in as many days, before falling back to trade down 0.1 percent.
UK retailers Tesco (L:TSCO) and Marks & Spencer (L:MKS) were among the biggest European fallers after their Christmas trading updates disappointed, with consumers cutting down on non-essential items.
Europe's retail sector (SXRP) was the worst-performing, down 0.8 percent as a result, while bank stocks (SX7P), which had jumped on Wednesday as bond yields surged, fell back 0.3 percent.
Danish jewellery firm Pandora (CO:PNDORA) dropped to the bottom of the STOXX, down 13 percent after the company said it expected profit margins to fall in the next few years and reported 2017 revenue below expectations.
Hexagon (ST:HEXAb) jumped up 4.2 percent, after its CEO was cleared of insider trading charges.
While it was too early in the season to fully determine what impact results were having, investors said earnings would be under particular scrutiny this year as the market hoped for another year of earnings growth.
"You didn't really have any earnings growth coming through since the euro zone crisis, it was a kind of Groundhog Day every year, but 2017 was a break from that effect," said Nick Davis, European income fund manager at Polar Capital.
"The earnings season will be quite important. If Europe can continue demonstrating earnings growth at index level as an asset class it will be very attractive," he added.
In other big moves, the restructuring French telecoms and cable firm Altice (AS:ATCA) tumbled 5.8 percent, extending Wednesday's slide, after its U.S. unit announced a $500 million junk bond sale.
Chipmaker STMicro (MI:STM) gained 3.2 percent after Credit Suisse (SIX:CSGN) upgraded the stock to 'outperform', saying margins for the iPhone supplier would continue to expand.
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Sodexo (PA:EXHO) also fell victim to disappointing results, its shares down 3 percent after the firm reported a slow start to its first quarter.
Written By: Reuters
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