Europe stocks struggle for traction amid earnings, fresh trade rumblings


European stocks finished in negative territory Wednesday, with health-care and retail companies weighing. Investors struggled to brush aside fresh trade concerns, which kept the broader market in a downdraft.

What are markets doing?

The Stoxx Europe 600












SXXP, -0.20%










 finished down 0.2% at 389.69, after finishing Tuesday’s session up 0.5% and marking its best close since late July.

The pan-European gauge is on pace for a rise of about 0.1% so far this week, with gains since Monday putting the index in positive territory for the year.

Germany’s DAX 30












DAX, -0.12%










 fell 0.1% at 12,633.54, while France’s CAC 40












PX1, -0.35%










 ending off 0.4% to 5,501.90. The U.K.’s FTSE 100












UKX, +0.75%










however, rose 0.8% at 7,776.65 as the British pound












GBPUSD, -0.3633%










 hit a one-year low against the dollar, falling to $1.2868, compared with $1.2938 late Tuesday, down 0.5%.

Meanwhile, the FTSE MIB Italy index












I945, -0.29%










 fell 0.3% to 21,790.30, while Spain’s IBEX 35












IBEX, -0.26%










 fell 0.3% to 9,747.10.

The euro












EURUSD, +0.1379%










 edged lower to $1.1583, versus $1.16 late Tuesday in New York.

A weaker currency can help lift sales and revenue for companies doing business outside of Europe.

What is driving the market?

Heavyweight health-care companies and retail companies weighed on stocks. The Stoxx 600’s biggest weighted company, Denmark-based Novo Nordisk AS












NOVOB, -5.96%











NVO, -5.80%










beat forecasts with its second-quarter earnings but warned on intensifying competition and price pressures going forward. Shares fell 6%.

Also in that sector, Roche Holdings Ltd.












ROG, -1.10%










 fell 1.1%. H. Lundbeck AS












LUN, -14.29%










 was the biggest decliner in Europe as it closed 14.3% lower after the pharmaceutical group’s adjusted profit came in shy of expectations.

Among retailers, Dutch group Royal Ahold Delhaize NV












AD, -1.60%










 fell by 1.6% after posting a 15% gain in net profit, but a fall in U.S. sales.

Also hampering some gains, trade worries returned to haunt investors after the U.S. said Tuesday that it will impose 25% tariffs on another $16 billion in Chinese goods, with that country expected to respond as it has in the past.

Read: Trade-war tracker: Here are the new levies, imposed and threatened

Don’t miss: A top London startup’s CEO flags the biggest Brexit threat to his industry

What are strategists saying?

“The earlier round of ‘tit for tat’ tariffs between the US and China on goods has been followed by much more entrenched negotiating positions. Global sentiment surveys have been the first casualty while global trade momentum has stalled—but not necessarily due to the trade dispute,” wrote Sean Darby, chief global equity strategist at Jefferies in a Wednesday note, referring to the tariff spat’s potential to further slowdown economic growth in Beijing and ripple throughout global markets.

“The bottom line is that to date trade tariffs have not noticeably impacted overall growth. However, there are no signs that the US and China are any closer in finding agreement on trade. The likelihood is that the dispute will run beyond the November US midterm elections,” he wrote.

Other stock movers

Shares of Lanxess AG












LXS, +4.82%










 shot up over 5% after news that the specialty-chemical group will sell its 50% stake in a Arlanxeo synthetic-rubber joint venture to Saudi Arabian Oil Co. for around €1.4 billion euros ($1.62 billion).

Shares ABN Amro Group NV












ABN, +3.47%










 jumped nearly 4% after the Dutch bank posted a profit fall.

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