- RBS paces retreat in lenders after its net loss widens
- Spanish, Norwegian shares are biggest gainers in April
European stocks fell to a two-week low as a stronger euro and mixed earnings reports prompted investors to assess the biggest monthly advance since November.
Lenders and carmakers fell the most among Stoxx Europe 600 Index groups. Royal Bank of Scotland Group Plc slid 6.1 percent after its net loss widened. Renault SA and Volkswagen AG dropped more than 4 percent on concern the euro’s move will hurt exporters. Sanofi tumbled 5.4 percent after its sales missed projections.
The Stoxx 600 declined 2.1 percent at the close of trading, as all 19 industry groups fell. The euro extended gains versus the dollar as weak U.S. data dimmed prospects for a rate hike there, while the Standard & Poor’s 500 Index headed for its biggest two-day drop since February.
“European markets are reacting to negative swings in the U.S., and with the euro stronger against the dollar, this doesn’t bode well for earnings expectations in Europe,” said Otto Waser, chief investment officer at R&A Research & Asset Management. “With risks bigger than opportunities, this could be the beginning of a profit-taking phase.”
While the Stoxx 600 today capped its biggest weekly drop since February, down 2 percent, shares have climbed in April. The benchmark reached its highest level since January last week, led by a rally in miners and energy producers. It’s up 1.2 percent this month.
The earnings season is well under way, and analysts have slashed estimates for the year. They project profit at Stoxx 600 companies will slide 2.2 percent in 2016, before growing at a double-digit pace in each of the next three years. Data today showed euro-area consumer prices fell more than forecast, even as the economy expanded at a faster-than-estimated pace.
Norwegian and Spanish equities were the biggest gainers in western Europe this month, with the OBX Index and the IBEX 35 Index up more than 3.4 percent. Ireland’s ISEQ Index was the worst performer, down 2.3 percent.
Among other shares active on corporate news today, British Airways parent IAG SA lost 4.7 percent after saying last month’s Brussels attacks will hurt second-quarter revenue. Restaurant Group Plc plunged 27 percent after the U.K. owner of Frankie & Benny’s eateries forecast a further deterioration in sales and said it has started a strategic review.
Danske Bank A/S gained 3.7 percent after its net income topped projections. Technicolor SA jumped 18 percent after its quarterly revenue surged and the media technology company confirmed its 2016 targets.