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European shares choppy as first-quarter earnings fail to set clear trend

Published 04/24/2018, 05:13 AM
Updated 04/24/2018, 05:20 AM
© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt
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By Julien Ponthus

LONDON (Reuters) - European shares had a choppy opening on Tuesday as a batch of first-quarter corporate results failed to set a clear upward trend and chipmakers were weighed down by AMS' warning of a downturn in orders.

The pan-European STOXX 600 (STOXX) was up 0.2 percent by 0840 GMT after spending some time in negative territory as it moved towards a heavy week of earnings.

Falls in business morale in Germany and Italy had little impact on trading but rising oil prices buoyed shares in the energy sector and offered some support to European indexes.

Consumer staples stocks, which investors have held as proxies to bonds for their stable revenues and income stream, rebounded after a session of losses on Monday when U.S. 10-year treasury yields threatened to cross the 3 percent benchmark and make their returns less attractive.

Austria-based chipmaker and Apple (NASDAQ:AAPL) supplier AMS (S:AMS) tumbled 13 percent after reporting lower orders from one of its main customers which it did not name, sending shares in other companies in the sector down.

"It is reasonable to assume that this will have a negative impact on STM's Q2 guidance as well", Liberum analysts said as shares in STMicro (MI:STM) fell 2.3 percent and peer Dialog Semi (DE:DLGS) tumbled 4.1 percent.

These results come as a strong growth in ad sales for Google despite a surge in costs at its parent Alphabet (O:GOOGL) brought some relief to the sector after a ropey few months for leading U.S. tech companies.

Germany's SAP (DE:SAPG) rose 3.5 percent after saying it was gaining ground on competitors Salesforce (N:CRM) and Oracle (N:ORCL) in the cloud and that its margin recovery was firmly on track.

The banking sector (SX7P), down 0.37 percent, got little support from the results of Santander (MC:SAN), the euro zone's biggest bank by market value, whose shares fell 2.2 pct after profits in the UK disappointed.

Deutsche Bank AG (DE:DBKGn) however added 1.6 percent. It may spell out strategy changes for its investment bank on Thursday along with first-quarter earnings.

Swiss bank UBS (S:UBSG) had failed to cheer up investors on Monday after its flagship wealth management business missed forecasts.

The automobile sector (SXAP), which has been a clear outperformer since the beginning of the year, edged down 0.5 percent, dragged down by AB Volvo (ST:VOLVb).

The truck maker cautioned that its supply chain was coming under pressure and saw its shares fall about 4 percent.

Results from French tyre maker Michelin (PA:MICP) and automaker PSA Group (PA:PEUP) also disappointed with shares down 1.6 percent and 1 percent respectively.

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

Dutch paints and coatings maker Akzo Nobel (AS:AKZO) lost 4.5 percent after reporting a larger-than-expected 28 percent drop in first-quarter core profit.

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