European stocks falter as investors digest weak earnings

Reuters LONDON | Updated on February 08, 2019 Published on February 08, 2019

European stocks faltered on Friday after their worst day in six weeks as downgrades to growth forecasts weighed, while weak numbers from Umicore, Skanska, and Rockwool outweighed a sales beat from L'Oreal.

The pan-European STOXX 600 hovered flat by 0825 GMT, in line with the DAX, while the FTSE 100 and CAC 40 managed to inch up 0.2 per cent.

French Cosmetics giant L'Oreal said strong demand for luxury skin creams helped it beat fourth-quarter sales forecasts - another company reporting better-than-feared demand from China after LVMH last week.

Its shares rose 1.2 per cent in early deals before giving back gains to trade up just 0.4 per cent. Traders put the move down to profit-taking after a strong run - L'Oreal hit a record high on February 5.

Luxury handbag maker Hermes topped the CAC 40 with a 1.5-per cent gain after it also said sales momentum in its Chinese stores stayed strong.

Luxury rivals Kering and LVMH also rose 0.6 per cent each.

Swedish electronics group Dometic shone, topping the STOXX with a 16-per cent jump after reporting fourth-quarter profit rose and giving a positive outlook for 2019 sales growth.

On the flipside, Belgian chemicals and cobalt refiner Umicore fell 4.7 per cent after saying it expected 2019 growth to be hit by subdued demand in cars and consumer electronics, and R&D costs.

Construction was a weak spot with Denmark's Rockwool sinking 13 per cent after full-year earnings missed expectations, and Sweden's Skanska losing 7.8 per cent after it cut its dividend and lagged profit estimates.

Autos fell 0.8 per cent, extending losses from Thursday when the sector suffered its biggest one-day drop since the Brexit vote aftermath in June 2016.

Tata Motors warned Jaguar Land Rover would swing to a loss due to weak sales, and that latest negative news on car demand weighed on auto suppliers Valeo and Faurecia , down 2.6 to 3 per cent.

Published on February 08, 2019
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