Connect with us

Hi, what are you looking for?

Uncategorized

European stocks close lower, Inditex shines on strong earnings

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 5, 2023. REUTERS/Staff

By Shreyashi Sanyal and Sruthi Shankar

(Reuters) -European stocks slipped on Wednesday, dented by healthcare stocks and concerns about the outlook for interest rates in the euro zone, although a strong earnings update from Zara owner Inditex (BME:) boosted retailers and Spanish shares.

The pan-European index fell 0.2%, with Wall Street also struggling for momentum ahead of inflation data and next week’s Federal Reserve’s policy decision.

Most regional markets in Europe dipped, but Spain’s rose 0.5% to close at a six-week high.

Inditex jumped 5.7% to a near six-year high after the retailer it reported a better-than-expected 54% jump in quarterly profit and said its spring-summer collection sales gathered pace in May.

The European retail index lead sectoral gains with a 2% rise.

“Double-digit sales growth has outstripped rising costs and helped to keep margins and cash balances healthy,” noted Aarin Chiekrie, equity analyst at Hargreaves Lansdown.

Stalling a recent rally in global stocks, data showed China’s exports shrank much faster than expected in May and imports extended declines.

Meanwhile, German industrial output rose less than expected in April, further darkening the outlook for the euro zone’s largest economy after weak new orders data earlier this week.

The benchmark STOXX 600 has been range-bound this week as concerns linger of further interest rate hikes by major central banks, including the European Central Bank and U.S. Federal Reserve next week, in the face of slowing economic growth.

Markets expect the Fed to skip a rate increase at its June meeting, while expectations of further ECB hikes remain.

The ECB will at least need two more rate hikes of 25 basis points in June and July, and should be ready to raise rates further if inflation stays too high, ECB governing council member Klaas Knot said.

Healthcare stocks fell the most in Europe, offsetting gains in economically sensitive sectors such as oil & gas and banks.

Among individual stocks, BE Semiconductor fell 6.3% after BofA Global Research downgraded the Dutch semiconductor equipment maker to “neutral” after it delayed the adoption of “hybrid bonding” in key smartphone market.

Danske Bank gained 8.0% as Denmark’s largest lender raised its long-term earnings target and said it plans to divest its Norwegian retail business.

Meanwhile, Deutsche Bank (ETR:) is streamlining its mortgage business, a move that will cut several hundred jobs through attrition and reassignments, Handelsblatt reported.

UBS said it has delayed the publication of its second quarter results until Aug. 31.

Read the full article here

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Videos

Watch full video on YouTube

Videos

Watch full video on YouTube

Videos

Watch full video on YouTube

Videos

Watch full video on YouTube