Europe shares end mostly lower amid disappointing earnings
FTSE up 0.40%; DAX down 0.44%; CAC 40 down 1.14% (Il Sole 24 Ore Radiocor) - London, 25 Jul - European shares closed mostly lower as the second-quarter earnings season gathered pace. Investors monitored earnings reports from European companies including Nestle, Unilever, Kering, Stellantis, Renault and Roche.
Traders also assessed a tech-driven selloff in the US, with the Nasdaq Composite and S&P 500 recording yesterday their worst sessions since 2022 as disappointing earnings from US giants Tesla and Alphabet hammered the technology sector.
The sector was already nursing sharp losses last week on profit taking as expectations of US interest rate cuts prompted investors to rotate into more economically sensitive sectors.
Traders also monitored German consumer confidence and eurozone and UK business activity data ahead of next week's eurozone gross domestic product figures for the second quarter.
In July, the business climate in Germany fell to 87.0 from 88.6 in June, according to the latest survey released by think tank Ifo. The reading was forecast to come in at 88.8.
The current conditions component of the index came in at 87.1, down from 88.3 the earlier month, while expectations came in at 86.9, down from 89.0.
Yesterday flash purchasing managers' index data showed that business activity stalled in the eurozone in July and disappointing earnings from large European banks also weighed, adding to concerns over a continued economic slowdown.
Markets also assessed data showing that the US economy grew 2.8% in the second quarter compared to a downwardly revised 1.4% in the first. The reading was well above analyst consensus of 2.0%. At the same time the core Personal Consumption Expenditures index, stripping out food and energy, rose 2.9%, above estimates of 2.7% but well below the previous quarter's 3.7%.
Political uncertainty continued to keep sentiment in check after US president Joe Biden over the weekend dropped out of the presidential race and endorsed vice president Kamala Harris as the Democratic nominee.
The move was broadly expected after Biden's underwhelming debate performance against Donald Trump in June, and after polls recently showed the increasing likelihood of an election win by Trump in November.
The London FTSE 100 closed up 0.40% at 8,186.35 points, the Frankfurt DAX dropped 0.44% at 18,299.96 points, the Paris CAC 40 fell 1.14% at 7,427.02 points, while in Milan the FTSE MIB lost 2.03% at 33,771.07 points, and in Madrid the IBEX 35 closed 0.61% lower at 11,141.99 points.
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(RADIOCOR) 25-07-24 18:01:32 (0672) 5 NNNN