European markets edge lower after batch of downbeat company earnings

European stocks edged lower on Tuesday as a slew of downbeat earnings and higher government bond yields outweighed gains in energy shares and a slight easing of concerns about risks stemming from the Middle East conflict.

While geopolitical tensions have gripped the market’s attention, investors also remain focused on the policymakers’ commentary for clues on the interest rate action from both the US Federal Reserve and the European Central Bank.

Dublin

The Iseq fell 0.9 per cent, underperforming the big European markets, amid declines for most of its biggest stocks.

Building materials company Kingspan fell 2.1 per cent to €65.62, while food group Kerry declined almost 1.8 per cent to €74.36. Ryanair ended 0.8 per cent lower at €15.04

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Packaging group Smurfit Kappa closed down about 0.7 per cent at €31.52, while Paddy Power owner Flutter Entertainment shed 0.9 per cent to finish at €153.50.

Bank of Ireland dropped 0.8 per cent to €9.48, with AIB bucking the negative trend to edge up 0.3 per cent to €4.38.

London

The blue-chip FTSE 100 rose 0.6 per cent. Figures showing a weakening labour market lifted investor sentiment on the basis that slower wage growth will reduce inflation pressure. The mid-cap FTSE 250 index added 1 per cent.

AstraZeneca was up 2.7 per cent as stock analysts at Guggenheim raised its price target on the heavyweight drugmaker, while the broader healthcare index added 2.1 per cent.

Rolls-Royce rose 1 per cent after the engineering company said it would cut 2,000-2,500 roles across its global business as part of a cost-reduction drive.

The rate-sensitive home builders’ index added 2.3 per cent and led sectoral gains, while Bellway reversed early losses and gained 3.3 per cent even as the home builder forecast about a one-third slump in annual output.

Energy stocks rose 0.9 per cent as oil prices moved higher ahead of a trip by US president Joe Biden to the Middle East.

Europe

The pan-European Stoxx 600 index slipped 0.1 per cent.

Construction and materials led sectoral declines, down 0.9 per cent. The European Commission said it was carrying out unannounced antitrust inspections in the construction chemicals sector in several member states, where companies were suspected of anticompetitive behaviour.

Ericsson dropped 5.9 per cent to the lowest in six years after the Swedish network equipment provider’s fourth-quarter guidance missed expectations and the company flagged uncertainty about recovery of its mobile networks business.

Rival Nokia’s shares fell 2.8 per cent, dragging the broader telecoms index down 0.8 per cent.

Nordic Semiconductor slumped 20.1 per cent after the Norwegian chip maker’s fourth-quarter revenue forecast missed expectations.

Umicore jumped 13 per cent after the Belgian chemicals and battery materials group updated its midterm capital spending outlook.

US

Wall Street reversed course to rise on Tuesday as upbeat earnings and signs of resilience in the US economy buoyed investor sentiment, even as a spike in Treasury yields pressured megacaps.

Bank of America gained 3.1 per cent, boosting the S&P 500 as it joined rivals in earning more from interest payments by its customers, while investment banking and trading fared better than expected.

Nvidia dipped 3.5 per cent after the Biden administration said it plans to halt shipments of advanced artificial intelligence chips to China. Defence contractor Lockheed Martin rose 0.8 per cent after beating third-quarter revenue and profit expectations.

Dollar Tree rose 4.4 per cent after analysts at Goldman Sachs upgraded the discount retail chain’s shares to “buy” from “neutral”. Cloud computing firm VMware fell 6.2 per cent as traders cited China approval uncertainty for Broadcom’s $61 billion cash-and-stock deal for the company. – Additional reporting: Reuters