Stocks decline on poor corporate earnings

Global equity markets slipped and bond yields fell on Thursday as investors awaited an agreement on a US aid package to mitigate the fallout from the coronavirus crisis, with poor corporate earnings reports also weighing on European shares.

DUBLIN

The Iseq all-share index gave up 0.46 per cent of its value on Thursday with the market unimpressed by poor results from the State’s largest banks.

AIB was the standout loser, slumping 11.76 per cent to €1.05 after it took a much higher than expected €1.2 billion upfront charge in the first half of the year to absorb expected loan losses from Covid-19. The bank slid to a first-half net loss of €700 million.

Bank of Ireland, which reported earlier in the week, slipped 6.11 per cent to €1.86.

Tullow Oil expects to record impairment of up to $1.7bn

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Food names were weak performers on the day in the absence of any sector specific news. Glanbia lost 5.5 per cent to close at €9.56 while UK-listed but Dublin-headquartered Greencore shed 4.7 per cent.

Kerry Group was an outlier in the sector, but still lost 1.22 per cent to close at €105.30.

Housebuilders were also weak on the day after Davy analyst Colin Sheridan wrote that the sector will "barely be profitable this year" as a result of restrictions which will impair the ability to deliver homes this year. Cairn Homes fell 3.52 per cent to €0.85 while Glenveagh Properties slipped 1.6 per cent to €0.73.

LONDON

London-listed shares broke a three-day winning run on Thursday as commodities giant Glencore tumbled after scrapping its dividend to pay down debt.

Glencore dropped 8.1 per cent as it also booked a $3.2 billion impairment charge, driving the FTSE 100 down 1.3 per cent.

British housing secretary Robert Jenrick said new housing starts could be down as much as 40 per cent this year even with the industry showing signs of recovery. Homebuilders Taylor Wimpey, Barratt Developments and Persimmon lost between 3.7 per cent and 4.3 per cent.

At the other end, insurer Aviva's shares shot up 4.6 per cent as analysts cheered its decision to reduce focus on Asia and Europe after reporting a 12 per cent drop in first-half operating profit.

The mid-cap FTSE 250 was down 0.9 per cent, with industrial and financial stocks among the biggest drags.

EUROPE

The pan-European Stoxx 600 index closed 0.7 per cent lower, with the German DAX down 0.5 per cent.

Engineering group Siemens rose 1.6 per cent after forecasting a modest improvement in orders and revenue in the months ahead.

Adidas gained 1.9 per cent as it expects a rebound in profits in the third quarter.

Among the fallers, French insurer AXA slid 3.5 per cent after it dropped its 2020 earnings target and said it would not make additional payouts to shareholders in the fourth quarter.

UniCredit was down 3.9 per cent as it vowed to stay out of a possible merger wave in Italy after reporting higher than forecast quarterly results.

Lufthansa slipped 1.2 per cent after saying it did not expect air travel demand to return to pre-crisis levels before 2024

NEW YORK

The tech-heavy Nasdaq clinched a new record high in early trading while the benchmark S&P 500 and blue-chip Dow were about 2 per cent and 8 per cent away from their own peaks.

Becton Dickinson and Co dropped 9.1 per cent after posting quarterly revenue below estimates as delayed elective procedures during coronavirus-led lockdowns squeezed demand for some of its devices.

Western Digital sank 15.7 per cent after the hard drive maker reported weaker-than-expected fourth-quarter revenue and forecast a soft current quarter.

Bristol-Myers Squibb gained 2.5 per cent after the drugmaker raised its annual profit forecast on hopes of a recovery in demand for its hospital-administered drugs.

ViacomCBS jumped 5.0 per cent after beating analysts’ estimates for quarterly revenue due to high demand for streaming. – Additional reporting: Reuters