Investing.com | Jul 30, 2020 08:55
By Peter Nurse
Investing.com - European stock markets slumped Thursday, weighed down by disappointing corporate news, particularly from the auto sector, despite the Federal Reserve reiterating its support for the U.S. economy.
Economic data last week, in the form of purchasing managers indexes, indicated that the euro area recovery has gathered speed in July. However, the earnings releases reflect the previous quarter, and have tended to show the severity of the hit from the coronavirus pandemic.
French carmaker Renault (PA:RENA), down 1.6%, posted a record net loss of 7.29 billion euros in the first half of this year, while German rival Volkswagen (DE:VOWG_p), down 5%, unveiled a first-half operating loss of 800 million euros, forcing the carmaker to slash its dividend.
Additionally, ENI (MI:ENI) stock fell 3% after the Italian oil giant reported a second-quarter loss and reduced its dividend. Royal Dutch Shell (LON:RDSa) just about avoided its first quarterly loss in recent history, while French rival Total (PA:TOTF) booked exceptional impairments of $8.1 billion in the second quarter, but maintained its dividend.
Casino Guichard Perrachon (PA:CASP) slumped 16% after reporting a much wider loss for the first half, Lloyds Bank (LON:LLOY) dropped 7% after reporting a rare pretax loss in the first half of the year.
On the flip side, AstraZeneca (NYSE:AZN) gained 2.5% after the pharmaceutical giant said that second-quarter net profit surged and that late-stage trials for the vaccine it is developing with University of Oxford researchers are under way, while Anheuser Busch Inbev (BR:ABI) jumped 7.5% after an encouraging beer sales recovery in June.
Late Wednesday, the U.S. Federal Reserve kept its benchmark rate near zero and suggested rates would remain in this range for some time.
"The economy will need high levels of accommodative monetary policy for an extended period," Fed chairman Jerome Powell said.
Second quarter GDP figures are due for release later Wednesday in both the U.S. and Germany and will reveal the depth of the economic fallout from the pandemic. Expectations are for an annualized decline in U.S. GDP of 34% on the quarter and an absolute decline of 9.0% in Germany.
Oil prices were lower Thursday, amid worries about the U.S. economic recovery, despite a huge 10.6 million-barrel drop in U.S. crude oil supplies last week.
U.S. crude futures traded 1% lower at $40.83 a barrel, while the international benchmark Brent contract fell 0.8% to $43.72.
Written By: Investing.com
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