Optimism on global trade outweighed by poor corporate earnings reports

Markets report: London stocks slip as general election uncertainty makes investors cautious

Wall Street: Beyond Meat tumbled 22.05 per cent as the vegan burger maker said it would need to offer more store discounts amid rising competition. Photograph:  Brendan McDermid

Wall Street: Beyond Meat tumbled 22.05 per cent as the vegan burger maker said it would need to offer more store discounts amid rising competition. Photograph: Brendan McDermid

 

European shares closed lower for the first time in seven sessions on Tuesday, as weak earnings dampened optimism surrounding the US-China trade progress and ahead of an expected interest-rate cut by the US Fed this week.

London stocks slipped as the prospect of a December general election put investors in Britain in a cautious mood. In the US, the S&P 500 eased back from a record high to trade near the unchanged mark.

Dublin

The Iseq finished the session almost unchanged. Paper and packaging group Smurfit Kappa slipped 1.8 per cent to €29.50, on a read-through from Finnish paper firm Stora Enso, which slumped 5.1 per cent as its quarterly profit dropped and it warned of global political uncertainties.

Ryanair rose by 1.5 per cent to close the session at €11.88, as oil prices tumbled, which is usually reflected positively in airline stocks due to the importance of fuel costs to their profitability.

Bank of Ireland, down 0.7 per cent to €4.21, and AIB, down 0.66 per cent to €3.02, slipped into the red along with many European bank stocks, with no end in sight for margin-eroding low interest rates.

London

Oil major BP was the biggest drag on the main bourse, sliding 4.2 per cent after reporting a sharp drop in third-quarter earnings on the back of weaker oil prices and lower production.

Financial companies, whose margins would be under pressure in a low interest rate scenario, were the second biggest sector-wide drag on the FTSE 100 as they tumbled 1 per cent to their lowest level in two weeks.

Royal Mail skidded 5 per cent – its steepest one-day drop in three months – to the bottom of the FTSE 250 after JP Morgan cut its rating on the stock to “underweight” from “neutral”.

Online trading platform Plus500 jumped 5.3 per cent after reporting a rise in customer additions and revenue for the third quarter as macro events drove strong trading.

Europe

The German Dax increased by 0.37 per cent while the French Cac moved 0.15 per cent higher.

Telecom stocks lost 1.7 per cent, the most among the major European sub-sectors, hurt by a 2.6 per cent slide in shares of Orange. Its sales in Spain are expected to remain under pressure from competitors.

Financials were pulled lower by a 2.4 per cent drop in Deutsche Boerse after the German exchange operator missed its third-quarter profit forecasts.

Banks were dragged lower by shares of Swedbank, which fell 3 per cent, after Estonia’s financial regulator said it decided to open a misdemeanour case with regard to the Estonian subsidiary of the Swedish lender.

Among positive movers, shares of German healthcare group Fresenius gained nearly 5 per cent to top the STOXX index after beating revenue expectations.

Airbus edged 1 per cent higher after Indian budget carrier IndiGo placed an order for 300 A320neo-family jets worth at least $33 billion.

New York

Drugmakers Merck and Pfizer both gained about 3 per cent after reporting upbeat third-quarter results to help keep the Dow and S&P near the flat-line. The healthcare sector, which has been the second-worst performer among the 11 major S&P 500 sectors this year, rose 1.30 per cent.

But shares of Google-parent Alphabet, however, lost 2.33 per cent and weighed on the Nasdaq as its quarterly profit missed estimates due to higher costs.

General Motors gained 4.95 per cent after its quarterly net profit topped estimates but the carmaker slashed its earnings forecast for 2019 as the 40-day US labour strike by the United Auto Workers union brought virtually all of its North American operations to a standstill.

Beyond Meat tumbled 22.05 per cent as the vegan burger maker said it would need to offer more store discounts amid rising competition.

(Additional reporting: PA/Reuters)