EUROPEAN shares slipped on Wednesday hurt by banking shares following a drop in shares of HSBC on a disappointing earnings report, while investors braced for the Federal Reserve’s last meeting minutes for any clues on the central bank’s rate outlook.
HSBC tumbled 8.4 per cent to record its biggest one-day drop since April 2020, after a shock US$3 billion charge on its stake in a Chinese bank, taking the shine off its record annual profit.
The broader banks index fell 1.1 per cent after the dive in the lender’s shares.
“Investors are focusing on the weak Q4 results, even though the bank increased its share buybacks and boosted its full year dividend to the highest level since 2008,” said Kathleen Brooks, research director at XTB.
The pan-European Stoxx 600 index edged 0.2 per cent lower, also bogged down by a 0.8 per cent loss in healthcare stocks, which eased from a 10-month high hit in the previous session.
French vouchers company Edenred slipped 11.5 per cent to the bottom of the Stoxx 600 after news its Italian unit was being investigated by the public prosecutor’s office in Rome over an allegedly fraudulent public tender launched in 2019.
Fresenius Medical Care fell 5.5 per cent as analysts flagged a weak outlook for patient volumes from the German dialysis specialist.
Earnings and updates from companies across the continent have been mixed for the quarter, though the benchmark index hit a two-year high recently as investors focused on the possibility of a first interest rate cut by the European Central Bank this year.
Mining shares lost steam and slid 0.8 per cent after Glencore reported bleak earnings and slashed its payout to investors. Shares of the UK miner dropped 1.1 per cent.
Peer Rio Tinto also fell, moving 1.5 per cent lower after reporting a decline in annual profit.
Among other movers, coffee company JDE Peet’s forecast 2024 organic sales growth at the low end of its mid-term target, taking its shares 5.0 per cent lower.
Carrefour was among the top gainer, climbing 4.9 per cent after Europe’s largest retailer reported solid results and announced a 55 per cent dividend hike on Tuesday.
EFG International rose 1.5 per cent after the Swiss private bank reported a jump in net profit last year, marking a record profit for the lender, which has hired extensively from Credit Suisse following the bank’s collapse.
Investors will now turn their focus to the US for the Fed’s last meeting minutes, due at 1900 GMT, to gauge the central bank’s interest-rate path and Nvidia’s results as expectations and forecast are high from the artificial intelligence darling after a stellar stock rally. REUTERS
