Cyclicals and ex-divs sap European shares amid earnings flurry

Rajalakshmi S Updated - January 09, 2018 at 05:42 PM.

european

European shares slipped on Thursday as cyclicals fell and some big stocks went ex-dividend, while earnings from firms including, Aegon and Coca Cola HBC, sparked significant moves.

The pan-European STOXX 600 index was down 0.3 per cent by 0835 GMT as basic resources and banks fell, while euro zone blue chips dipped 0.3 per cent.

Britain's FTSE 100 dropped 0.8 per cent as large caps

Anglo American, BT Group, Rio Tint o and
Lloyds fell after going ex-dividend, while Germany's DAX retreated 0.3 per cent.

While rising political tensions between the US and North Korea hit risky assets globally in the previous session, with financials leading losses among European equities, company results were the dominant focus on Thursday.

Shares in insurer Aegon and soft drinks bottler Coca Cola HBC rose 8.5 per cent and 9.4 per cent, respectively after their updates.

Aegon beat expectations for its second quarter underlying pretax profit, while Coca Cola HBC shares hit a record level after first half sales were higher than expected.

“Aegon released a very strong set of Q2 results marked by a significant increase in the group SII ratio, strong underlying earnings and an improved outlook for capital generation," analysts at KBC Securities said in a note.

Second-quarter results, however, put pressure on shares in staffing firm Adecco, chemicals company Lanxess and consumer group Henkel, which were among the biggest fallers.

Around 70 per cent of MSCI Europe firms have reported second quarter earnings so far, of which more than 60 per cent have either met or beaten analysts' expectations, according to Thomson Reuters data.

Financials and the energy and materials sectors have seen the biggest beats, while industrials have had the biggest misses.

“Broadly in Europe, I had thought that (earnings) wouldn't be as good, partly because the strength of the euro would make (firms') export market less attractive and earnings would be more impinged by that, but it doesn't so far seem to be the case,” James Butterfill, head of research and investment strategy at ETF Securities, said, adding that a pick-up in domestic demand is likely to have helped.

Shares in Belgian biotech firm Galapagos were the top risers on the STOXX index, surging around 17 per cent after a successful mid-stage study for its lung fibrosis drug.

Telecoms company SFR was up 9.6 per cent after Altice raised its stake in the firm to more than 95 per cent and said that it was planning a full buyout offer for remaining shares.

Published on August 10, 2017 10:16