European shares subdued by Orsted slide, insurers rise

By Shashwat Chauhan

(Reuters) – European shares struggled for direction on Wednesday as losses in utilities, led by Denmark’s Orsted (CSE:), kept a lid on gains, while insurers rose on positive results from Prudential.

The pan-European held steady at 460.1 points, having touched a near three-week high moments after the opening bell.

UK’s outpaced regional peers, rising 0.4% as Prudential climbed 3.8% after the Asia-focused insurer posted a higher first-half operating profit.

European insurers, meanwhile, added 0.8%.

Danish stocks lagged, falling 0.9% as Orsted slumped 20.1% after the world’s top offshore wind farm developer said it anticipates impairments of up to 5 billion Danish crowns ($729.78 million) on its U.S. portfolio.

Shares of other wind energy firms like Siemens Energy and RWE fell 3% and 3.4%, respectively.

The broader utilities sector lost 2.2% and could see its worst one-day percentage fall in nearly six months, if losses hold.

Heavyweight energy stocks gained 0.2% as crude prices rose after industry data showed a large draw in crude inventories in the U.S., the world’s biggest fuel consumer. [O/R]

The basic resources sector added 0.6%, hitting a three-week high.

Euro zone bond yields rose after data from the German state of North Rhine-Westphalia (NRW) showed a rise in inflation, supporting expectations that the European Central Bank’s tightening cycle might not end soon. [GVD/EUR]

Separately, preliminary data showed Spain’s consumer prices rose 2.6% year-on-year in August.

“The ECB doesn’t have growth and it’s still got inflation that seems to be ticking back up,” said Patrick Armstrong, chief investment officer at Plurimi Wealth.

“They almost certainly have to hike again this year because today’s inflation data shows there’s still more work to do.”

European banks gained 0.9%, touching their highest level in nearly three weeks.

was subdued ahead of August inflation data due later in the day. Also on the radar would be a euro zone consumer confidence print.

Meanwhile, figures by fund manager Janus Henderson showed companies around the world are on track to pay investors a record $1.64 trillion in dividends this year.

Among other individual stocks, Brunello Cucinelli gained 5.5% as the Italian luxury fashion brand lifted its full-year sales guidance for the third time this year.

Direct Line Insurance Group rose 1.6% after the British motor and home insurer named Adam Winslow, a senior executive at Aviva (LON:), as its new CEO.