Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

European stocks recoup most losses; weak outlook hits SAP

Published 10/21/2021, 03:24 AM
Updated 10/21/2021, 12:23 PM
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 8, 2021. REUTERS/Staff

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 8, 2021. REUTERS/Staff

By Anisha Sircar and Susan Mathew

(Reuters) -European stocks steadied at six-week highs on Thursday, as buying of defensives and growth stocks helped offset losses in miners and disappointing earnings forecasts, including from software major SAP.

Sentiment was also subdued by renewed concerns about China's property sector after the collapse of a $2.6 billion asset sale at indebted developer China Evergrande Group.

After declining as much as 0.6%, the Europe-wide STOXX 600 index ended down 0.1% at 469.71. A European equity strategist at Bank of America (NYSE:BAC) had earlier this month set a year-end target of 420 for the STOXX 600, implying a fall of about 10% from current levels.

European miners, which have a large exposure to China, shed 3.0% as iron ore and base metal price plunged. [MET/L] [IRONORE/] UK-listed shares of Anglo American (LON:AAL) fell 2.7% even though it reported a 2% rise in overall production in the third quarter.

"Mining stocks have been unable to shake investor concerns sparked by yet another twist in the Evergrande saga," said Danni Hewson, a financial analyst at AJ Bell.

Data on Wednesday showed euro zone consumer confidence fell by 0.8 points in October from September.

Company after company has warned that supply issues and price hikes aren't going to be a flash in the pan and are going to impact earnings going forward, AJ Bell's Hewson said.

Europe's most valuable tech company SAP dropped 3.2% and was the biggest drag on the STOXX 600 despite positive third-quarter results as traders were unimpressed by the company's outlook, particularly its licensing forecast.

Swiss engineering and tech group ABB tumbled nearly 6.2% after it lowered its full-year sales forecast and warned of shortages of components, while Sweden's AB Volvo fell about 0.4% after it said chip shortages hampered production of its trucks.

Nordic Semiconductor plunged 12.4% after its core earnings fell slightly year-on-year and the company warned of rising costs.

There was no relief for banking stocks either. The sector fell 0.4% even though UK's Barclays (LON:BARC) and Finland's Nordea reported upbeat quarterly results.

Spain's lender-heavy IBEX index slipped 0.8%, the most among regional peers, after downbeat earnings at Bankinter weighed.

Defensive sectors such as personal and household goods index rose 0.8% on the back of Unilever (NYSE:UL)'s third-quarter earnings beat.

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 8, 2021. REUTERS/Staff

Luxury stocks were also higher after Birkin bag maker Hermes rose 1.4% on strong quarterly sales.

Cartier-owner Richemont advanced 0.4% after HSBC raised the brand to "buy" from "hold", citing its leadership and momentum in the jewellery industry.

Latest comments

lt needs to go down again....
It needs to go down again.
thanks
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.