Europe’s main stock index fell on Tuesday, hurt by a handful of disappointing quarterly results from big companies such as energy giant BP, pharmaceutical company Novartis and bank Santander, as caution prevailed even ahead of some crucial economic data.
The pan-European STOXX 600 index closed 0.6% lower after hitting an intraday high recorded more than a week earlier.
BP shares fell 5% after the company’s third-quarter earnings fell to their lowest level in nearly four years, sending the energy sector index tumbling 1.2%.
Novartis shares fell 4% as investors focused on lower-than-expected sales of a promising radiopharmaceutical from the Swiss company, even as it raised its 2024 earnings forecast for a third time.
The healthcare sector index fell nearly 1% to its lowest level in three weeks, also hurt by a 7.4% decline at dental implant maker Straumann following weak third-quarter performance from its U.S. operations in the North.
The travel and leisure sector was hit hardest, with shares of German airline group Lufthansa falling 5% after the company reported lower operating profit in the third quarter.
However, Asia-focused lender HSBC Holdings jumped 3.3% after a better-than-expected third-quarter profit and a $3 billion share buyback program.
According to recent data from LSEG, of the STOXX 600 companies that have reported third-quarter earnings to date, 53% have beaten estimates, falling short of the typical rate of 54%.
Investors are also turning their attention to a slew of economic data, including the eurozone bloc’s third-quarter GDP and October inflation, as well as U.S. GDP and non-farm payrolls, all of which will be published later this week.
Adding to the economic concerns that led to a rate cut by the European Central Bank earlier this month, the German Chamber of Commerce and Industry has lowered its previous forecast of stagnation and expects zero growth in 2025 for the largest European economy.
After reaching an all-time high last month, the STOXX 600 has lost momentum. Caution around the US elections could delay the index’s journey towards the key level of 530 points.
“The 530 point level is a possibility before the end of the year as fundamentals could support it. But I think it will largely depend on the outcome of the US elections,” said Fiona Cincotta, senior market analyst at City Index.
Source: Terra
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