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European shares drop as Carrefour, WPP results get frosty reception

Published 03/01/2018, 03:41 AM
Updated 03/01/2018, 03:50 AM
© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt
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LONDON (Reuters) - European shares slid on Thursday as a flurry of uninspiring earnings updates from retailer Carrefour and advertiser WPP kept the mood downbeat, while broader jitters over tightening monetary policy spilled over into March.

The pan-European STOXX 600 (STOXX) index was down 0.5 percent in early deals, while Germany's DAX (GDAXI) fell 0.7 percent Britain's FTSE (FTSE) felt the weight of Brexit uncertainty with a 0.3 percent loss.

Results were squarely in focus, with shares in French supermarket Carrefour (PA:CARR) dropping 6 percent after the group cut its dividend amid a cautious outlook for 2018 profitability.

Retailers have struggled in the face of Amazon's rise and adapting to a tech-led world.

Plans by fast-fashion company Zalando (DE:ZALG) to expand into two new markets were not met well by the market, with its shares also falling around 3.8 percent as investors assessed the impact of such heavy investment.

Elsewhere the UK's Carpetright (L:CPRC) slumped 23 percent after the firm said that it was in talks with lenders about shoring up its balance sheet, following a profit warning at the end of January.

Another firm which has struggled in a digital age was advertiser WPP (L:WPP), whose shares dropped 11.7 percent after it said that it would simplify its structure after posting its worst performance since the financial crisis as consumer goods firms cut their spending on advertising.

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

On the positive side, shares in beer giant Anheuser-Busch InBev (BR:ABI) jumped 5.7 percent after its fourth quarter profit beat expectations than expected thanks to a rebound in Brazil and savings from its 2016 purchase of SABMiller (LON:SAB).

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