European Shares Trim Best Week in Two Months as Automakers Slide

European Stocks Snap Five-Day Winning Streak
  • Volkswagen retreats as data show European market share shrank
  • Greek banks push ASE ahead after ECB adds bonds to QE list

European stocks snapped a five-day winning streak, trimming their weekly gain, as automakers led the Stoxx Europe 600 Index lower. 

Volkswagen AG slid 2.4 percent after data from the European Automobile Manufacturers’ Association showed its share of the European market contracted to a five-year low. Daimler AG dropped 2.1 percent. Energy producers retreated as oil fell for a third day before major suppliers meet in Doha to discuss an output freeze. Miners declined for a second day, led by Anglo American Plc and Glencore Plc as industrial metals slipped.

The Stoxx 600 fell 0.4 percent to 342.79 at the close of trading, paring its weekly advance to 3.3 percent. European stocks, which hit their highest levels ever a year ago, are now struggling for fresh impetus after rebounding as much as 14 percent from a Feb. 11 low. The equity benchmark has traded in a tight range in the past month amid renewed concern over the prospects for global growth and is down 6.3 percent since the start of the year.

“The week has been pretty good and markets are catching a break today,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “Earnings are looking OK and I don’t expect a huge rally from here, but step by step, we will climb up the wall of worries and go higher. The biggest concern is if earnings next week come lower than expectations -- it could change the market mood.”

Investors are assessing earnings reports for clues on corporate health, with analysts predicting profit at Stoxx 600 companies will shrink in 2016, reversing earlier calls for growth. Gains this week have pushed the index’s valuation to about 15.7 times estimated profit, which is almost 20 percent above the average multiple for the past five years.

Greece’s ASE Index posted the best performance of western-European markets today, with Piraeus Bank SA leading a surge in domestic lenders after the European Central Bank said some of their bonds are eligible to be bought under its quantitative-easing program.

Among other stocks moving on corporate news, Anheuser-Busch InBev NV supported food-and-beverage companies, rising 1.8 percent after agreeing to create a fund that will support the South African beer industry and protect jobs in the country to help seal approval for its proposed takeover of SABMiller Plc, which added 1.6 percent.

Carrefour SA advanced 3.8 percent after France’s largest retailer reported higher first-quarter revenue as growth in southern Europe and Latin America compensated for a drop in China.

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