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European Stocks Close Lower As Traders React To Earnings News, Evergrande Debt Woes

European stocks closed weak on Thursday with investors largely making cautious moves, digesting mixed earnings updates and reacting to news about the collapse of a $2.6 billion asset sale at heavily indebted developer China Evergrande Group.

China Evergrande reportedly won a more than three month extension to the maturity of a $260 million bond, a day after a deal to sell a $2.6 billion stake in its property services unit failed.

Worries about a surge in coronavirus cases hurt as well. According to reports, COVID-19 deaths in the UK have been rising once again, and hospitals are filled with patients.

The pan European Stoxx 600 edged down 0.08%. The U.K.'s FTSE 100 declined 0.45%, Germany's DAX ended 0.32% down and France's CAC drifted down 0.29%, while Switzerland's SMI climbed 0.22%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Iceland, Ireland, Norway, Poland, Portugal, Russia and Spain closed weak.

Denmark, Netherlands and Turkey moved up, while Sweden settled flat.

Rio Tinto declined nearly 5%. BHP Group shed about 3.7%, while Barratt Developments, Evraz, Smiths Group, Antofagasta, Rentokil Initial, Coca-Cola, BP, Natwest Group and BAE Systems lost 1.7 to 3%.

Barclays Group declined 0.8% despite reporting better than expected quarterly results.

Miners Glencore, and Anglo American both shed more than 2.5% on fears that Evergrande's debt troubles could hit China's broader economic recovery.

Halma, Reckitt Benckiser, Legal & General, Hikma Pharmaceuticals, Croda International, IAG, Relx and 3I Group gained 1.5 to 2%. Consumer goods giant Unilever gained about 1.1% after its third-quarter sales growth beat forecasts.

In the French market, Technip drifted down 4.8% following a drop in revenue. ArcelorMittal shed about 3.6%, Legrand declined 2.7% and Saint Gobain lost 2%. Shares of French railway company Getlink ended weak after reporting a fall in third-quarter revenue.

Sodexo moved up nearly 3%. Carrefour gained about 2% after keeping its guidance for FY 2021 net free cash flow "comfortably" above 1 billion euros.

LOreal and Hermes International moved higher on fairly strong results. Safran, Faurecia, Atos, STMicroElectronics and Air France-KLM also closed notably higher.

In Germany, SAP, Siemens and HelloFresh declined sharply, while Volkswagen, Adidas, Merck, Puma, Porsche Automobil, Sartorius, Zalando, Symrise, Deutsche Bank and Fresenius gained 1 to 3%.

Swiss engineering and tech group ABB plunged more than 6% after lowering its full-year sales guidance. Online pharmacy Zur Rose lost about 7.6% despite the company reporting significant revenue growth in all markets.

In economic news, the UK budget registered its second biggest deficit for the month of September since the records began in 1993, the Office for National Statistics said on Thursday.

Public sector net borrowing excluding public sector banks was GBP 21.8 billion in September, the second-highest September borrowing since monthly records began in 1993. This was GBP 7.0 billion less than in September 2020.

In the financial year-to-September 2021, PSNB excluding banks totaled GBP 108.1 billion 2021. This was also the second largest financial year-to-September borrowing on record and was GBP 101.2 billion less than in the same period last year.

UK manufacturers expect new orders to grow at a faster pace in the next quarter, survey results from the Confederation of British Industry showed. According to the Industrial Trends survey results, a net of 22% said new orders grew in three months to October, which was slower than July's 48%.

Survey results from the statistical office Insee showed confidence among French manufacturers remained unchanged in October. The manufacturing confidence index held steady at 107 in October, the results showed. The score was forecast to fall to 105 from September's initially estimated value of 106.

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