Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

European earnings resilience limits stocks downside - Barclays

Published 05/03/2024, 05:10 AM
© Reuters
FCHI
-
DE40
-
STOXX
-

Investing.com - April was a difficult month for European stock indices, but Barclays noted that overall earnings resilience has likely limited the downside for equities.

European equities largely pulled back last month, with the German DAX and the French CAC 40 indices dropping more than 2% and the broad-based Stoxx 600 index falling more than 1%.

That said, although equities have pulled back, newsflow has improved a bit, noted Barclays. “If it continues to hold, that would mean the current correction may not need to extend further.”

Nearly two-thirds through the reporting season, EPS growth on a year-on-year basis is tracking better than expected, the bank said, adding that earnings beats have improved further since it reported last week, and are considerably higher when compared with the fourth quarter.

“Margins are resilient and [are] making up for relatively softer top line beats. Price action has been subdued compared to Q4 given high macro volatility, and while dispersion between beats and misses is very high, overall earnings resilience has likely limited the downside for equities,” Barclays said.

At the sector level, the tone has improved the most for Tech, Utilities, Healthcare and Materials. On the other hand, newsflow in Communication Services, Industrials and Energy has deteriorated.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.