EUROPEAN shares closed lower on Wednesday (Jul 24), dampened by luxury stocks after dour results from LVMH weighed on the sector, while a raft of lacklustre corporate earnings in other parts of the market such as banks also added to the downbeat mood.
The pan-European Stoxx 600 index closed 0.6 per cent lower, with technology the top sectoral decliner with a 2.4 per cent loss, as Dutch chip-making equipment supplier ASM International dropped 9.4 per cent despite raising its third-quarter guidance after second-quarter orders beat analyst estimates.
Other semiconductor-related companies such as BESI, and ASML also fell 8.5 per cent and 3.4 per cent, respectively.
Temenos shed 5.6 per cent after the Swiss banking software firm lowered its annual outlook, citing an impact of short-seller Hindenburg Research’s report on its half-year performance.
Shares of the world’s largest luxury goods firm LVMH fell 4.7 per cent after it missed estimates for second-quarter sales. Christian Dior, part of the group’s fashion and leather goods division, fell 4.7 per cent, while other luxury heavyweights such as Kering, Hermes and Hugo Boss shed between 2.1 per cent and 4.5 per cent.
The French benchmark CAC 40 index lost 1.1 per cent, underperforming other regional bourses.
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European lenders lost 0.5 per cent, with Deutsche Bank down 8.3 per cent after the German bank posted its first loss in four years in the second quarter after setting aside 1.3 billion euros (S$1.9 billion) as a provision for an investor lawsuit.
Earnings season in Europe and the United States has gotten off to a rocky start, with the Stoxx 600 index wavering amid a whirlwind of mixed earnings reports.
Across the Atlantic, dismal results from US electric automaker Tesla and tech giant Alphabet also dented sentiment.
Meanwhile, HCOB’s preliminary composite Purchasing Managers’ Index data showed growth in eurozone business activity stalled this month as a tepid expansion in the bloc’s dominant services industry failed to offset a deeper downturn among manufacturers.
“Today’s weak figures put a question mark over a noticeable economic recovery expected by many forecasters for the second half of the year,” Commerzbank economists said.
“This does not mean that there will be no recovery at all, but it will come later and will probably be weaker than generally expected.”
Among other stocks, Iveco Group slumped 14.5 per cent after the Italian truck and bus maker’s operating profit fell 4 per cent in the second quarter.
On the bright side, Spain’s Santander gained 3 per cent after the eurozone’s second-biggest bank hiked its profitability goals following strong growth at its main retail business. REUTERS
