European shares fall but rallying oil prices temper losses
Investors concerned about China cutting additional support to economy
European shares fell on Tuesday as battery maker Umicore kicked off a busy week of earnings with a grim outlook and investors grew concerned about China cutting additional support to its economy, but a rally in oil and gas stocks helped temper losses.
The pan-European Stoxx 600 index fell 0.3 per cent by 0930 GMT after seven straight sessions of gains, with all major indices in the red except oil major-heavy London’s Ftse 100 which rose 0.4 per cent.
Earnings started to roll in on a not-so-positive note with Umicore tumbling 16 per cent, after the Belgian group warned revenue and earnings growth in 2020 will be lower than previous indications due to delays in the electric vehicle and energy storage markets.
Umicore’s slide weighed heavily on Belgium’s blue chip Bel 20 Index, pulling it 1.5 per cent lower.
Car part suppliers Plastic Omnium and Faurecia also reported first quarter results. Plastic Omnium slid after warning of a decline in worldwide auto production, but Faurecia rose 1.5 per cent after the company met its full-year target.
Belgium’s Melexis, which supplies semiconductor solutions for cars, slipped 6 per cent after first quarter net income tumbled.
The banking index eased from six-month highs with major European banks as UBS, Credit Suisse and Barclays slated to report earnings late this week after last week’s mixed bag of results from big Wall Street banks.
“We’ve seen the likes of record profits from J.P. Morgan but nothing close in Europe. The numbers aren’t going to be great,” said Lawler.
Payments company Wirecard was among the biggest decliners after Germany’s markets regulator Bafin’s two-month ban on short-selling ended on Friday.
Ahold Delhaize slid after the Dutch supermarket warned that a strike at its Stop & Shop chain in US would hurt its underlying 2019 profit margin, as it missed out on around $200 million on Easter week sales.
Also weighing on sentiment was Beijing’s indication to tone down its stimulus measures following unexpected signs of recovery from first-quarter economic data last week.
Oil prices were at 2019 highs on Tuesday after Washington announced all Iran sanction waivers would end by May, pressuring importers, mostly Asian, to stop buying from Tehran.
Getinge was the top performer on the Stoxx 600 after the Swedish medical technology company beat first quarter sales estimates and said restructuring measures will boost profit in the second half of the year.
Thomas Cook jumped 14 per cent after a Sky News report that the world’s oldest tour operator was tentatively approached by several parties regarding a takeover of its tour operating division or the entire company. – Reuters