50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

European shares ease after Fed decision, mixed earnings

Published 05/02/2024, 03:33 AM
Updated 05/02/2024, 12:40 PM
© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 30, 2024.     REUTERS/Staff/File Photo
INGA
-
NVO
-
STOXX
-
SCBFF
-

By Ankika Biswas and Johann M Cherian

(Reuters) -European shares fell slightly in their first May trading session on Thursday as investors returned from a mid-week holiday to gauge a slew of earnings after the Federal Reserve signalled a delay in U.S. interest rate cuts.

The pan-European STOXX 600 eased 0.2% after logging its first monthly decline this year in April.

Market sentiment has cooled as investors navigate risks surrounding the Middle East conflict, the European Central Bank's policy outlook beyond June, and the corporate earnings season.

European equities were closed due to the Labour Day holiday on Wednesday, a day that saw the U.S. Fed signal rates would stay higher for longer owing to recent disappointing inflation readings.

"Powell noted the uncertain path forward for U.S. inflation, our base case remains that inflation and economic growth will cool off, allowing the Fed to begin cutting rates in September," UBS analysts said in a note.

While investors are widely confident of an ECB interest rate cut in June, there is still a touch of uncertainty about the path beyond that.

On the earnings front, Danish drugmaker Novo Nordisk (NYSE:NVO) raised its 2024 outlook as it races to boost output of its Wegovy weight-loss treatment. But competition from rival Eli Lilly (NYSE:LLY) forced the company to cut prices of the drug, knocking its shares nearly 3% lower.

The drugmaker weighed on Copenhagen's OMX 20 index, while the broader healthcare sector lost 0.7%.

Netherlands' ING Groep (AS:INGA) rose 6.4% after announcing a 2.5-billion-euro ($2.68 billion) share buyback and a strong first-quarter performance, while Britain's Standard Chartered (OTC:SCBFF) jumped 8.8% following a first-quarter profit beat, putting the banking index among top gaining sectors.

Hugo Boss was the STOXX's biggest loser, down nearly 10% after the premium apparel brand flagged weaker demand in China and concern about U.S. consumer sentiment ahead of the presidential election.

Of the 136 companies on the STOXX 600 to have reported earnings to date, 58.8% have exceeded analyst estimates, compared with a long term average of 54%, according to weekly LSEG data released on Tuesday.

Danish shipping giant Maersk dropped 4.4% after a first-quarter earnings miss, while French office services and call centre company Teleperformance was up 13.8% on higher first-quarter sales.

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 30, 2024.     REUTERS/Staff/File Photo

Danish hearing-aid company GN Store Nord rose 11.9% after better-than-expected first-quarter earnings.

Meanwhile, a survey showed the ongoing downturn in euro zone manufacturing activity deepened in April, pushing firms to reduce headcount again.

Latest comments

Risk Disclosure: 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.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.