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European shares dip as earnings flurry fails to lift sentiment

Published 02/22/2018, 12:18 PM
© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt
BARC
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LLOY
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AXAF
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VIE
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TEF
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KBC
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GMAB
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DEMANT
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DTEGn
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CNA
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AAL
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MONY
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INGC
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GLEN
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O2Dn
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STOXX
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By Julien Ponthus

LONDON (Reuters) - European shares fell slightly on Thursday as a flurry of corporate results failed to lift sentiment after a new wave of speculation about faster hikes in U.S interest rates soured risk appetite globally.

An hour after the open, the publication of the German business confidence index, which fell more than expected in February, and a downward revision in UK economic growth cemented the gloom, although a rebound on Wall Street from losses in the previous day helped shares come off lows.

The pan-European STOXX 600 (STOXX) index ended down 0.2 percent, having fallen as much as 1 percent earlier in the session. The index remains down 5.7 percent from the two-and-a-half year peak hit at the end of January.

"Stock markets are weaker today after the Federal Reserve released the minutes of their latest meeting last night," said CMC Markets analyst David Madden.

Barclays (L:BARC) was the best performing stock among blue-chips, rising 4.4 percent after it pledged to restore its full dividend with a payout of 6.5 pence per share in 2018.

The earnings further buoyed optimism on British banks, a day after Lloyds (LON:LLOY) reported its highest pretax profit since 2006.

Other financial companies had positive news, with French insurer AXA (PA:AXAF) posting higher than expected 2017 net profit and Belgian financial services provider KBC (BR:KBC) boosted by solid performances in the Czech Republic and its international business.

Their shares rose 0.6 percent and 2.3 percent respectively.

Denmark's Genmab (CO:GEN), Europe's biggest biotechnology company, posted the best performance within the STOXX 600, surging as much as 19 percent as it reassured investors on sales growth of blood cancer drug Darzalex this year.

Denmark-based hearing aid manufacturer William Demant Holding (CO:WDH) was second with a 6.9 percent jump after results came in above forecast.

In the currently unpopular utilities sectors, France's Veolia (PA:VIE) jumped 2.1 percent after reporting an acceleration of growth in early 2018. Double-digit international growth and a recovery in France boosted 2017 core earnings.

UK energy supplier Centrica (L:CNA), which issued a profit warning in November, rose 7.5 percent after it raised its cost saving target by 500 million pounds and said it would cut about 4,000 jobs by 2020.

In another unloved sector, Deutsche Telekom (DE:DTEGn) lost 2.4 percent after its results, and Telefonica Deutschland (DE:O2Dn) fell 2.6 percent after RBC cut its target price by 13 percent. Telefonica (MC:TEF) rose 3.8 percent after a well-received earnings update.

French payment technology company Ingenico (PA:INGC) suffered its worst trading day in 16 years, down as much as 20 percent in the early morning, after announcing 2018 guidance below analyst expectations.

In contrast to the positive share price reaction to Glencore's (L:GLEN) upbeat results on Wednesday, Anglo American (LON:AAL) fell 0.6 percent after presenting 2007 results that missed some forecasts.

© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt

Moneysupermarket.com (L:MONY) fell 13.7 percent after the price comparison website said its earnings would not grow this year as it tries to reinvent itself to focus on more personalization, mobile and new products such as mortgages.

(additional reporting by Danilo Masoni; editing by Tom Pfeiffer)

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