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Banks and Daimler cast pall over European stocks; CRH, Dassault rally

Stock MarketsFeb 06, 2019 03:45AM ET
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© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

LONDON (Reuters) - European shares were slightly lower on Wednesday as weak results from banks, including BNP Paribas (PA:BNPP), and carmaker Daimler brought an end to the market's six-day rally.

Europe's STOXX 600 fell 0.1 percent in early deals, with the index stalled near the more than two-month highs hit on Tuesday. Germany's trade-sensitive DAX was down 0.4 percent and France's CAC 40 fell 0.3 percent.

President U.S. Donald Trump's combative State of the Union added to gloom on markets as he unveiled no new infrastructure initiatives and instead raised the prospect of another shutdown should financing for the Wall not be forthcoming.

Daimler fell to the bottom of the DAX, down 1.9 percent, after the German carmaker said fourth-quarter operating profit fell 22 percent, as trade wars and ballooning costs for developing electric and self-driving cars hit profits at Mercedes-Benz cars.

Auto makers and suppliers were down 0.6 percent.

Banks were the biggest drag on the STOXX 600, with shares BNP Paribas down 1.6 percent after France's largest-listed lender lowered its profit and revenue growth targets for 2020 after a tough fourth quarter.

The news reinforced concerns about the euro-zone banking sector's struggle with low interest rates and tough trading conditions.

Credit Suisse (SIX:CSGN) was down 0.6 percent after the Swiss bank said it expected a higher tax rate for 2018 than previously forecast.

In contrasting fortunes, London-listed CYBG jumped 10 percent to the top of the STOXX 600 after reporting a slight rise in lending in the first quarter of its 2019 fiscal year, facing down strong competition on Britain's housing mortgage market.

Dassault Systemes shot to four-month highs after the French software company's fourth quarter revenue topped guidance, while Finnish engineering firm Metso jumped more than 8 percent after its results.

CRH (LON:CRH) rallied on news that activist investor Cevian Capital has built a stake to become the second largest shareholder in the heavy materials and building products group.

Banks and Daimler cast pall over European stocks; CRH, Dassault rally
 

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