European shares dip amid ongoing trade tensions

Markets report: Iseq down almost 0.8% as Aryzta hits fresh low

Weak corporate earnings in the pharmaceutical sector weighed on sentiment already soured by escalating trade issues.  Photograph: Bloomberg

Weak corporate earnings in the pharmaceutical sector weighed on sentiment already soured by escalating trade issues. Photograph: Bloomberg

 

European shares dipped on Wednesday as poor corporate earnings in the pharmaceutical sector weighed on sentiment already soured by trade tensions, with Washington preparing tariffs on another $16 billion (€13.8 billion) of Chinese goods.

Paddy Power Betfair was among the fallers in Dublin and London after the bookmaker lowered its full-year outlook. The FTSE 100 otherwise went against the negative trend after sterling weakened.

DUBLIN

The Iseq finished almost 0.8 per cent lower on a difficult day for several stocks. Baked goods group Aryzta plunged to a new low, dropping 6.25 per cent to €9 as sentiment remained negative against the stock.

Paddy Power Betfair fell more than 7 per cent in both Dublin and London, where it has its main market listing, after it cut its full-year earnings guidance to a range of £460-£480 million, compared to the £475-£490 million it had previously signalled. In Dublin, it closed down 7.1 per cent at €84.

There was weakness in Dalata Hotel Group, which closed down 2.2 per cent at €6.60, while Kerry Group was down 0.4 per cent at €92.10. Both Kerry and Glanbia report half-year earnings on Thursday morning.

Ryanair added 1 per cent to close at €13.60, with traders noting that confirmation of a pilots’ strike in Germany had already been built into its share price.

LONDON

Sterling dropped to its lowest level against the dollar in almost a year, lifting the share prices of the multinationals on the FTSE 100 that tend to benefit from a weaker pound.

The index of blue-chip shares ended up 0.75 per cent, in contrast to the declining fortunes of other European indices. This was its fourth consecutive climb.

Financials were the biggest boost to the FTSE with shares in HSBC, Prudential and Barclays all rising between 1.3 and 3.7 per cent.

Dublin-headquartered but London-listed UDG Healthcare also took a hit, down more than 10 per cent after flagging weakness at its contract sales and patient support services operations.

Bellway fell 1.3 per cent after the builder said it expected home price growth to slow in the year ahead, hitting margins.

EUROPE

The pan-European Stoxx 600 ended the session down 0.2 per cent, with the European healthcare index leading losers, down 1 per cent. In Germany, the Dax closed down 0.1 per cent, while France’s Cac 40 ended 0.35 per cent lower.

Trading updates from Danish drugmakers Novo Nordisk and Lundbeck disappointed investors and their shares dropped 6 per cent and 14 per cent respectively.

Other blue-chip results also weighed, with Dutch food retailer Ahold Delhaize down 1.6 per cent. Italian bank BPER Banca lost nearly 6 per cent, with one analyst citing disappointing quarterly interest income. French supermarket chain Casino shed 6 per cent after broker Bernstein cut the stock to “underperform”.

NEW YORK

US stocks fluctuated between gains and losses as investors assessed the latest salvos in the trade spat between China and the US.

Tech and bank shares buoyed the major indices, while energy producers led losses after crude oil prices sank 4 per cent. Chevron dropped 1.2 per cent and Exxon 1 per cent, while trade-sensitive stocks such as Boeing and Caterpillar also declined.

Tesla shares were down 2.4 per cent, following a steep rise a day earlier on after chief executive Elon Musk tweeted a plan to take the company private. Drugmaker Mylan fell 3 per cent after missing earnings estimates and Snap lost ground after reporting a decline in daily users.

Walt Disney retreated after its quarterly trading update fell short of analysts’ expectations, with the media giant trading down almost 1.8 per cent at lunchtime in New York. Rupert Murdoch’s 21st Century Fox was due to report its results after the close of markets on Wall Street. – Additional reporting: Reuters / Bloomberg.