Shares dip on weak commodities outlook
European shares remained stuck at seven-week lows yesterday as a fall among commodities-related sectors and telecoms firm Altice outweighed a buoyant tech sector.
The pan-European STOXX 600 erased earlier gains to end the session 0.6pc lower. This was the sixth day of straight losses for the benchmark. In Dublin the Iseq was down 0.46pc at 6,758.21.
"Markets have moved quite a long way and a pause is probably warranted, but we don't think it's a big turning point," said Ronan Carr, European equity strategist at Bank of America Merrill-Lynch (BAML).
"Underlying fundamentals are still pretty constructive in terms of global growth, and we would be a buyer of any material dip in markets," he added.
While materials stocks and oil firms were the biggest sectoral fallers due to a pullback in oil and copper prices, the biggest individual faller was Altice.
Altice plummeted more than 13pc after Morgan Stanley cut its price target on the stock by 34pc, adding to pressure on the shares which are already down 46pc this year.
Stocks have had violent reactions to results this quarter, Goldman Sachs strategists said.
As the earnings season nears its end, MSCI eurozone companies are tracking 9.9pc year-on-year earnings growth in US dollar terms, and 62pc of companies in the eurozone index have beaten or met earnings estimates.
Analysts have revised down earnings estimates for the broader MSCI Europe, but downgrades seem to have stabilised as the results season developed.
Oil declined yesterday on evidence of rising US output and a gloomier demand outlook growth from the International Energy Agency (IEA) weighed on prices.