Sunday 23 July 2017

European markets slip as oil prices decline again

Traders gather for the IPO of real estate investment trust MGM Growth Properties LLC., on the floor of the New York Stock Exchange. Photo: Reuters
Traders gather for the IPO of real estate investment trust MGM Growth Properties LLC., on the floor of the New York Stock Exchange. Photo: Reuters

European shares retreated from three-month highs on Wednesday as oil prices fell, but the losses were limited by some solid earning updates, including those of UK chip maker ARM.

The pan-European FTSEurofirst 300 index was down 0.3pc in early trading, after rising 1.5pc the day before, when it reached its highest since early January.

Crude oil prices fell yesterday after Kuwaiti oil workers ended a three-day strike that had cut the nation's crude output by around half. Sharp losses on Chinese markets also led to some profit-taking after the recent gains.

"There is probably room for a short-term correction ... following the lead from losses in China and in oil prices," said Alessandro Balsotti, portfolio manager at JCI Capital in London.

The European healthcare stocks index fell around 1pc, the biggest loss for a sector, after a rally in the past two days. The personal and household goods stocks index was down 0.8pc, the next-biggest loss.

In Ireland, the ISEQ Overall Index was down 0.7pc at 6,210.47 by mid-afternoon.

Shares that were moving included Bank of Ireland, which was up 2pc at 25 cent. Shares in fruit firm Fyffes were 2.5p higher at €1.61, while shares in hotel group Dalata were down 1.6pc at €4.24.

The UK's FTSE-100 was down about 0.3pc in the afternoon. Figures yesterday showed a rise in unemployment in the UK. Germany's DAX was up 0.1pc, and France's CAC-40 was flat.

ARM Holdings gained 2.8pc after reporting a 14pc rise in first-quarter profit, outperforming a weak semiconductor market, as its most advanced chips were used in an increasing number of smartphones. Rival Intel said on Tuesday that it's slashing 12,000 jobs as PC ship sales decline.

Shares in several companies reacted sharply yesterday after their announcing quarterly results.

About 4pc of the companies in the STOXX Europe 600 index have reported earnings, of which 60pc have met or beaten analyst forecasts, according to Thomson Reuters StarMine.

Power grids maker ABB and telecoms operator Telia also rose following earning updates .

Volkswagen rose more than 5pc, leading the gains on the FTSEurofirst, on optimism it can offer US authorities an acceptable resolution of its emissions-test-rigging case.

Wall Street was flat at the open yesterday as encouraging earnings reports offset oil prices sliding on renewed concerns about global oversupply.

(Reuters)

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