Turmoil in Chinese markets bleeds into Europe and London

Continued turmoil in Chinese markets bled into European trading on Tuesday, and pulled London stocks lower despite improving Covid case numbers.

DUBLIN

Euronext Dublin outperformed its international counterparts as it ended the day up 0.2 per cent on the back of gains made by some of its heavier hitters.

Kerry Group and insulation maker Kingspan were both up 0.6 per cent, while Ryanair finished the day up 2 per cent after it reported a 196 per cent year-on-year rise in revenue for the first quarter of 2020 on Monday.

Smurfit Kappa, which is reporting results on Wednesday, finished the day up 1.2 per cent.

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Among the laggers were farming group Origin Enterprises, which closed down 4 per cent, while food names Total Produce and Glanbia were down 7 per cent and 1 per cent respectively. Paddy Power Betfair parent Flutter Entertainment was down 0.5 per cent.

LONDON

The Ftse 100 fell 0.4 per cent, weighed by insurance and consumer staple stocks, with Lysol maker Reckitt Benckiser adding to the pressure as it missed quarterly sales estimates.

Reckitt dropped 8.4 per cent, marking its worst day since February 2003, after missing sales growth estimates and warning on margins as costs rise and easing lockdowns slow demand for products such as Lysol disinfectants.

Other consumer staple stocks, including Imperial Brands, British American Tobacco and Associated British Foods, fell 0.1-1.1 per cent.

The mid-cap Ftse 250 index fell 0.2 per cent. Among other stocks, British online greeting card publisher Moonpig tumbled 9.3 per cent after it warned demand would slow in its new financial year as shops reopened.

Daily Mirror publisher Reach gained 6.7 per cent after it said it was trading ahead of expectations and that it expected the strong momentum to continue.

British transport company FirstGroup fell 0.2 per cent after its chief executive, Matthew Gregory, said he planned to step down in September.

EUROPE

European stocks lost ground after falls in Chinese shares and Reckitt Benckiser’s warning on margins ahead of earnings updates from big fashion retailers later in the day.

The pan-European Stoxx index fell 0.5 per cent in its second straight session of losses.

Dutch company Prosus, which has a stake in Chinese technology giant Tencent, slumped 7.2 per cent to the lowest since May 2020, after Chinese stocks sank to multi-month lows.

Most European sector indexes fell, with technology stocks leading declines as Logitech tumbled 9.9 per cent after the Swiss maker of computer equipment maintained its full-year targets, despite reporting better-than-expected quarterly results.

French software company Dassault Systemes rose 1.3 per cent after it raised its 2021 forecasts following strong momentum across its businesses.

NEW YORK

US stock indexes retreated from record highs with the Nasdaq tumbling as much as 2.1 per cent as caution kicked in ahead of earnings reports from some of the most valuable technology companies on Wall Street.

Apple, Microsoft, Amazon and Google parent Alphabet, the four largest US companies by market value, sank 1.3-2.6 per cent, and were the top drags on the S&P and the Nasdaq.

Facebook, which is set to report earnings on Wednesday, sank 1.9 per cent. Electric car maker Tesla fell 3.6 per cent, as concerns over production being hit by a semiconductor shortage offset initial optimism over a better-than-expected second-quarter profit.

US-listed Chinese stocks extended losses as fears over more regulations in the mainland persisted. Alibaba and Baidu lost about 5.5 per cent and 4.5 per cent, respectively.

General Electric rose around 0.3 per cent after lifting its annual free cash flow forecast. Intel sank 3.5 per cent after it said its factories would start building Qualcomm chips and laid out a roadmap to expand its new foundry business.