Thursday 23 November 2017

European stocks retreat from highs

A sign displays the crest and name of the London Stock Exchange in London
A sign displays the crest and name of the London Stock Exchange in London

Reuters

European shares pulled back from two-year highs on Tuesday as heavyweight defensive sectors dropped and some earnings reports disappointed, though oil stocks were a bright spot.

The pan-European STOXX 600 index reversed earlier gains to end the session 0.5pc lower, after trading at its highest level since August 2015 over the past few days.

The DAX ended the session down 0.7pc after hitting a new high.

In Dublin the Iseq was down 0.90pc at 7,157.43.

"When you consider how much ground the FTSE 100, DAX and CAC have made in the past couple of months, a pullback of this size isn't anything (out) of the ordinary," David Madden, market analyst at CMC Markets UK, said in a note. Falls among health stocks and large consumer staples, such as Nestlé and AB Inbev, weighed most. These sectors are sensitive to movements in the dollar, which rose. A number of disappointing earnings updates also put a dampener on sentiment.

BMW fell 2.8pc after its third-quarter earnings fell 5.9pc, near the low-end forecast in a Reuters poll, due to upfront costs for new technologies and models.

Chipmaker Dialog Semiconductor dropped 5.7pc following a cautious outlook for the fourth quarter.

Also under pressure after their updates were shares in Danish shipping group AP Moller Maersk, Siemens Gamesa and London-listed security group G4S, all down between 4.7pc and 7.1pc.

Despite a positive start, Britain's FTSE 100 ended the session down 0.65pc. A sliding pound and buoyant oil prices failed to lift the mood in British shares on Tuesday as grim economic data and disappointing corporate earnings from G4S and Primark owner ABF weighed.

Irish Independent

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