European shares flat, weak oil majors offset gains in chipmaker ASML

Reuters July 17 | Updated on July 17, 2019 Published on July 17, 2019

A shares trader checks his trading systems at the start of the trading session in Frankfurt, Germany. File pic   -  Reuters

European shares were flat on Wednesday as upbeat results from chipmaker ASML and pharma firm Swedish Orphan Biovitrum were offset by a steep fall in oil stocks, with rising Sino-US trade tensions weighing.

ASML rose 3.4 per cent and boosted the tech sector after it reported better-than-expected quarterly results and kept to its forecast of a solid growth for the rest of the year.

The biggest percentage loser among European sectors was the oil and gas sector, down 1.14 per cent, as energy heavyweights BP Total gave up more than 1 per cent after US crude trailed gains for international benchmark Brent on oversupply worries.

The pan-European stocks benchmark was flat at 0810 GMT.

A rise in expectations of further monetary easing by central banks has helped stock markets globally recover from a pounding in May due to concerns over global growth and the impact of US President Donald Trump's trade war with China.

In another sign that the conflict could be protracted, Trump said on Tuesday the US and China have a long way to go to strike a deal and that he could impose tariffs on an additional $325 billion worth of Chinese goods if needed.

“Hopes of a quick deal went out the window when negotiations broke down in May. From then on it's quite logical to assume that it's going to be some time before we get to a deal,” said Bert Colijn, an economist at Dutch ING bank in Amsterdam.

“The trade concerns are having an impact on the output of the industrial side in Europe and we haven't seen a turnaround in that so far... the concerns for European markets have not faded away and are likely to stay with us for some time.”

The banking sector fell 0.4 per cent on Wednesday, led by Swedish banks, as Handelsbanken fell on poor results, while Swedbank slipped after cutting its shareholder pay-out policy.

The worst performer on the main index was Swedish leisure products supplier Dometic, diving 8.4 per cent after it cut 2019 outlook and reported weak second-quarter results.

The top performer on the index was Swedish Orphan Biovitrum , which jumped 15 per cent after the company hiked its full-year outlook and reported a rise in second quarter core earnings.

Swiss watchmaker Swatch rose 5 per cent despite a 11.3 per cent slump in first-half net profit as it anticipated “strong growth” in the second half due to easier comparisons and “continuing strong demand in most important markets”.

Auto stocks were hit by data that showed European car sales dropped 7.9 per cent in June, led by bigger declines for Nissan, Volvo and Fiat Chrysler.

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Published on July 17, 2019
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